Episode 92 - Timothy Peterson

Erik Martinez: Welcome to the Digital Velocity Podcast. I'm Erik Martinez and today we're talking to Timothy Peterson about integrating AI into our businesses from an executive perspective, Timothy has over 25 years of leadership experience in e-commerce and digital operations, and today he serves as a fractional president and CEO of multiple business ventures.

Timothy, welcome to the show.

Timothy Peterson: Erik, I am so glad to be here. Thank you for inviting me.

Erik Martinez: Yeah. Well, when we met three months ago, I thought you were never gonna schedule, so I'm glad we finally got on the books.

Timothy Peterson: I'm just in such high demand. I couldn't squeeze you in for three months. That's what really [00:01:00] happened.

Erik Martinez: Tim, before we dive in, I'd gave just a real quick synopsis, but can you give the audience kind of a sense of who you are and what you're doing and why you're doing it?

Timothy Peterson: Sure. I'll give you the two minute rundown. My early career was mostly retail. I was a retail boss at Bloomingdale's, Macy's, Pottery Barn and Old Navy many places. I did personal shopping for years, to celebrities and wealthy people. That was a lot of fun. I had a great time. I learned a lot about sales then as you can imagine 'cause it's very hands-on.

I also had started my own tech business back in the eighties when I was still in college. It was a pre-internet tech business. It was desktop publishing and I actually did software training for companies, including Apple at that point. It was very long time ago.

Jump ahead. Time passes. I evolved that career into something in e-commerce starting in 1999, I think was my first e-commerce role. So it's 26 years in e-commerce already. And I've worked every single [00:02:00] angle possible in that space. Marketing, operations very data-driven.

I was a head of business intelligence for a major CPG company at one point and to bring us up to today I'm working mostly on a variety of startups or on companies that need tender loving care that have kind of had some issues or some bumps or need a redirection. And I'm also primarily working with an investor group on their startups, although there are exceptions to that.

It's a lot of fun, a lot of challenges, and it brings in all that experience from decades. So it's a lot of fun for me.

Erik Martinez: That is an exciting path. I mean, 1999 I launched my first e-commerce website. You were just getting in the e-commerce and really that is kind of the year in my head, that is the birth of the modern day e-commerce business.

Timothy Peterson: It feels like it. I mean, at that point, just to tell our listeners who may not have been born then, that some of the things I was working on were like Geo [00:03:00] Cities websites and, these weird catalog businesses. Like, Erica and I do share some background way, way back.

There was a company I worked for many years ago called Prefer, and Prefer was a data company. But we had a lot of catalog clients and we had a lot of retail clients in addition to e-commerce clients and catalogers were trying to figure out - well, how do we move this to the web? What do we do?

Is it a separate business? Do we silo it off? All these sorts of things. And I was around for that whole early era. It was a great learning experience. A lot of fun.

Erik Martinez: It was crazy times. Crazy times. It's funny, we're gonna talk about some AI here. And some of the listeners may know this, but my first job outta college was working with a company to try to build forecasting tools using neural networks in 1994.

Timothy Peterson: Wow. That's great. That's amazing.

Erik Martinez: We were not successful. But cool

Timothy Peterson: Ahead of your time, that's what it was.

Erik Martinez: We were way ahead of our time, but now we have the [00:04:00] ability to use these tools. I mean, essentially these AI models are neural networks that we can use to do forecasting and prediction. So it's kind of fun. So, as we kind of dive in, I think the big picture question is what do you think the single biggest strategic opportunity or threat that AI presents for businesses today?

And then what are you doing about it?

Timothy Peterson: Well, those are both good questions, right? Because, you could have a lot of theoretical notions, which people tend to have, especially when you're out on LinkedIn and you see everyone posting about what they're thinking. But not as many people are actually doing. So I think one of the great opportunities really relates to every angle possible on personalization.

It's really a hyper personalization i'd say. This is something that people have done in one way or another for decades. However, the opportunity now is very different. You can bring in so many data sets simultaneously. You could be thinking about anything [00:05:00] related to a consumer, not just where they live or their age, or classic demographics or psychographics you may have collected through surveys or focus groups.

But really applying hundreds of other data sets. And I'm not exaggerating when I say that there's a company that I've worked with a data company. It's in quiet mode, so it doesn't really even have a name yet, but they have probably a couple hundred data sources. Which is very interesting in trying to build their models and thinking about how to personalize.

So I would say number one would be personalization and then scaling it. Maybe that's the right way to put it. It's like you're scaling personalization, like how do you get hyperfocused and then how do you grow, right? I think that is what I would say on that side of the question.

I'll quickly answer the other part and you can dive into any piece, but I'd say the other thing is, I think we are in an early moment for AI, so we also have to be careful not to dive in so completely and so blindly that trust is eroded.

'cause there are a lot of great [00:06:00] brands that people trust and like for whatever reason - great product, great service, great retail experiences, whatever it might be. If you're diving into AI too completely or too blindly, people might not trust you anymore. They might wonder what's going on.

Why are you all of a sudden changing everything that I liked about your business? So I think that is a huge risk attached to the same opportunity.

Erik Martinez: I think that's fascinating 'cause I hadn't really thought about that as a risk. I've seen some examples of companies who are going all in on AI to the point where they are building their entire process around a tool set. And me personally, I kind of feel that's totally wrong.

Like you've got that backwards. Your recipe for success. Your business is a formula that has lots of different components. And if you tie yourself to one tool set. That tool set is rapidly evolving. Where does that leave you?

Strategically, [00:07:00] I feel like that's a problem, but the way you framed the risk is changing your business so that people don't like it.

How do you think that plays out? I mean, do you have an example or a thought of what people are doing that might lead them down that path?

Timothy Peterson: Well, I can give a couple examples. And we don't even have to name the companies because I think consumers or any listener will, understand these brief examples. One is really a customer service related thing. When people first dived into AI, and this is still true, one of the easiest things you can do is chat bot, right?

You're attaching it to FAQs and you're taking customer service scripts or perhaps customer sales scripts. So you have all of these different data sets to load and you say, go run with it. So, all of a sudden you're on an app and you're given this opportunity to chat with Starbucks.

And I actually had this experience not too long ago where they didn't give a reward for something. And it's just a classic thing where I don't want to take a lot of time as [00:08:00] a consumer, but I'm losing something if I don't. So those particular experiences where you used to relatively quickly be able to get to a person, or maybe you didn't have to choose from 16 things in a dropdown, and if it was other you didn't know what to do.

Now, what's happening is the AI has more and more options, in the chat, but you don't necessarily get exactly where you need to go for that particular moment in time, quickly enough. So you get frustrated and you have to go, and then they give you $10, right? I mean, so they're wasting my time and they're wasting their money by doing this incorrectly. It erodes the brand.

That is one of the classic experiences that people have. It's true in airlines. It's true for Macy's. This is classic. They had some issues with this when they first changed over to an AI surge driven chatbot where people couldn't find orders and numbers were just completely lost. You'd enter in an order number and it would say, we don't know what that [00:09:00] is, which is amazing.

Erik Martinez: And that was one of the things we were talking about pre-show, right? There's a lot of hype about these tools. In fact, it's funny that you're bringing this topic up. 'cause one of my guests that we just released a couple weeks ago, his name's Ken Burke and Ken, I think you probably even met

Timothy Peterson: I know Ken. Yep.

Erik Martinez: So Ken has started a new company to kind of replace chatbots. And I can tell you we did some consumer research last fall and retail customers hate chatbots. Why? For the reason you just said, I mean, go to any big site and play with them. They're not very good.

Timothy Peterson: Yep.

Erik Martinez: To our customers, whatever that is. We're not. Are there any other big risks with AI that you are concerned about in the types of businesses that you're working

Timothy Peterson: Yeah. I'll give you another one that I think our listeners will be able to relate to. I'm working with a number of businesses that are very reliant on content. They have user-generated content, they have their own content. One of those is a company I'm working with that has a lot of [00:10:00] music related content.

It's fantastic. A lot of video, a lot of the stuff is unique and proprietary because they had rights from various DJs around the world for these different events, like an AVISA or whatever. It's very specific content. And if you mess up the way in which you find this content, or the way in which it is presented, or the risk is that somehow the content is not protected in the way it should be through AI training data.

If you're not authorizing and people are taking the data. We had a situation where one of the major, I'm gonna just say major and underline it, AI players out there had gotten to our content and started using it as training data without our authorization.

And we were wondering what was going on. Tracked it down, figured it out, contacted them, told them no. And then they apologized and said they would remove it, from [00:11:00] their training data. But we shouldn't have had to do that. We should not have had to tell them that our proprietary data was our proprietary data and it was not available for their training.

So the those kinds of issues I think are enormously risky and dangerous because the training data could be anything. It could be your personal data, my personal data. It doesn't have to be something that's like, music from a concert somewhere. It could be personal. And so I think that's still one of the biggest risks.

And I'd like to see more privacy officers get trained in AI as quickly as possible. And I know some who have some very great people who have, but more people need to be trained in that. Working with legal teams, marketing teams, operational teams, whatever. And keeping an eye on it, that's a big issue.

Erik Martinez: Yeah, I think that's really interesting, especially in light of that fair use case that just came out in the news within the last couple of weeks. Like, Hey, you can use books to train, but you have to pay for them.[00:12:00]

Timothy Peterson: Yeah.

Erik Martinez: Now. I think what's still unsettled is how much. If an AI tool can buy a book, consume it for training purposes and then disseminate facts about it - how many copies does that equate to?

Timothy Peterson: Well, I'll tell you a couple things that relate to it, because ASCAP and BMI which makes sure that, songwriters and performers are paid. I've dealt with them for many years, again, for one of these companies I'm involved with, and they're a big deal and we're making sure that everybody's satisfied and it's rights management or however you want to put it, whatever the broad title would be.

But you're right. What do you do with books? We have relationships with authors who self-publish, who actually want to promote their books, through content, on our various platforms and whatever and then it's like, well, how are we protecting them? How are they being paid? That has to happen.

I don't have the answer necessarily to that, but it needs to happen in the way it happens for music. After [00:13:00] people learned about this and the big issues, whenever, 20 years ago at this point.

Erik Martinez: Yeah it's gonna be an evolving spirit. So now let's kind of pivot a little bit because you mentioned something earlier, which is really talking about governance. You're talking about privacy officers trained in AI and I think, governance and compliance. The people I follow are all about having AI councils.

There's a lot of data starting to come out about potential new roles surrounding the concept of AI. AI privacy officer was one of 'em, chief AI officer, potentially pulling that out of the IT sphere because it is broader. And I can tell you, I won't mention any names, but I was working with a client -just doing some training on AI giving his team some prompt training.

And what was very interesting is he is like, "Oh, well if I use APIs, I'm gonna have to involve [00:14:00] IT." I'm like, "Well, no. Do you have connectors over here?" He goes, "Oh, I don't have to involve IT". So as you are looking at the businesses that you work with, sitting in the leadership role, choosing the direction of your organization. What do you think about and what are the things you're telling your teams or the teams in those companies about how they should approach this?

Timothy Peterson: So a couple things, and you brought up a lot of good points, in that brief, intro there, right? A lot of good points. I think we have to look at this moment in the same way that we looked at early data privacy overall. I think that's a key way that companies need to just look at this.

AI is different. It's not just this tiny little category within because it's so broad. It's so far reaching. It's so fast moving, all of these things. So I've used a couple terms, which may or may not ever catch on, but one of the things I say is kind of governance as a service. Like gas. [00:15:00] I kind of make a joke about it in a way. You gotta give it gas, governance as a service.

Erik Martinez: I like that. You heard it here first folks.

Timothy Peterson: You heard it here first. Put it on a shirt. But the idea is a solid idea. It's essentially saying, look, in the way that people come in and consult on anything, right?

There gotta be people who are expert in whatever moment we're in and stay up to date on all of these things so that we can go in and say - look, this is what you need to consider. These are the rules that currently exist. The laws that currently exist. Here are the standards that people have agreed to so far.

Here are things that we're still open, and it covers a lot of areas. It can't just be legal. It can't just be marketing. It's really gotta touch all of these areas because they're all touching AI in one way or another and AI's touching them in one way or another.

So what I basically advocate is that it has to be talked about. It has to be taken very seriously. It can't be dismissed. And that there have to be people not [00:16:00] person assigned to be responsible for this, to actually take it seriously and talk about it on a regular basis. Small companies, maybe you're not gonna have, a whole lot of resources and you can't take a whole lot of time and whatever, but the bigger the company gets, the bigger an issue it's gonna be if you don't do this.

That's kind of the way I look at it. So, it's that governance as a service idea, however it comes out. It could be a committee, it could be something else.

Erik Martinez: Yeah I'm liking it to, we all like to joke about the government and all the three letter agencies, right? But you think about the three letter agencies and why they formed, because the government's so big that there is a need for specialization in the area that agency has purview over.

And then of course, the inefficiency comes in the overlap. So as you're looking at that and saying, okay, in a small company it might be a person or two.

Timothy Peterson: Yeah. Yep.

Erik Martinez: As the companies get bigger, [00:17:00] who takes the leadership to make sure that one - somebody's getting assigned, and two- that somebody is getting the resources that they need to execute the scope?

Timothy Peterson: Well, I think the question is different for a lot of different businesses based on how they're currently structured. Who takes responsibility? If you're a bigger company who takes current responsibility for privacy? Who takes it for legal compliance, who takes it for environmental sustainability? Who takes it for anything? Fill in any of those blanks for things that might be something you have to take seriously.

The bigger your company gets you have to take a bigger view of it. So if there are current structures in place, then you're gonna have to add this into the list and figure out how to have a person, in that area, and then maybe people in that area who are also already working in privacy or whatever.

But I'll tell you what you can't do. If there's a privacy person, you can't just say, "Oh, you go do AI now." I think [00:18:00] that's not the appropriate way until their fully trained up and understanding, what that entails, what it means, and then they could raise their hand and say, "Look I don't think I'm the only person that should be doing this. Here's everybody else."

So it's going to be a different answer for every company, but everyone's gotta contend with it. It's not something that's gonna go away. It's not like, NFTs, like, everyone work on NFTs now, it's not like that. Or the metaverse where everyone must run to the metaverse.

It's not like that. This is something that is going to affect us no matter what.

Erik Martinez: Yeah. I mean, whether we think about it or not, everybody has access to and is using some form of AI, even if it's not deliberate.

Right? Because it's getting embedded into all the tools. It's in our phones, it's in our computers, it's in our browsers these days. So I think that's the hard part is like where is the starting point?

'Cause you used the words trained up, and we can show that there's a lot of data [00:19:00] saying companies are putting money into AI, but they're putting it into tools. They're not necessarily putting it into people.

And I philosophically think that has to change.

That we need to invest some more money in leveling up our people, whatever their roles are within the organization. And, you are probably fantastic at AI.

Timothy Peterson: But thank you.

Erik Martinez: The person sitting next to you is not, but you have the same role. And with the business owners I've talked to, I said, "Well, isn't that a problem for your organization?"

They're like, "Yeah." So what are you doing about it? And they're like, "Well, we haven't really thought about it." And I'm getting a lot of that. And I'm assuming that you're getting a lot of that.

Timothy Peterson: I am. And I'll tell you from simple to more complicated how to really respond to this. One is even small companies do things - you might as well call them a lunch and learn, right? Where you're offering your teams free education for an hour, and you're doing this at a scheduled time every single week of the year.

So [00:20:00] 52 hours a year, you are offering free training to people, and there's nothing crazy about that. I do lunch and learns on invitation and often for free, because I know these things are really important. I'll go in and say, "Here's a quick way to approach X. Approach it this way, quick and dirty- go."

That's step one. Step two is you get more advanced. You're gonna have to send people for certifications online or off. There are degree programs that are getting built at a number of colleges around the country. I participated in the preparation of one where they're working on offering first certificates and then eventually majors, and then eventually degrees in things like e-commerce and AI. AI for marketers, or AI for finance or what have you.

You're gonna have to tackle it. You can't just say, I'll wait, or you can't just say, we're not doing anything. Start with getting somebody in for a lunch and learn. Maybe take it up to what can we use [00:21:00] online that is free and that's reliable and real to understand, like where is the data coming from?

How is it being protected? What are these models? How reliable are they? Why are their hallucinations? People have to understand what all that means, and what that means for their business. First, high level, and then keep going deeper.

Erik Martinez: Yeah. I love that. I think that's a really simple way for people to get started. Now, finding the right resources and stuff does take some time.

Timothy Peterson: Oh, yeah.

Erik Martinez: But that is a really good, simple, actionable step everybody listening could probably implement within the next couple of weeks. And I think it's important.

Timothy Peterson: I'm gonna add one other thing just for a second. And again, I wanna make sure listeners think about this in the most easy, simplistic way. When I was in college, there was no e-commerce and there was no internet as we know it. And yet I ended up becoming an e-commerce expert. And I've been going from there, right?

What happened? It's not like I took classes in college. There were no classes because it [00:22:00] didn't exist. I started in the simplest possible way. I taught certain things to myself. I learned from whoever the experts were at that moment in time.

I kept going, that's what we need to do for AI now. It doesn't matter what age you are, it doesn't matter where you are. AI is a relatively new thing, and it's happening very quickly all around us. So I think we just need to jump on this in any way possible.

Erik Martinez: Yeah I think that's fantastical. Fantastical? That's fantastical advise.

Timothy Peterson: It's fantastical I'm gonna use that.

Erik Martinez: Oh my gosh. My wife is well known for creating words it's like her favorite sport. And one day we were talking about, I don't know, something with gloves and whatever, and she's like, gription.

Timothy Peterson: Oh, that's good.

Erik Martinez: Yeah, that's a really cool word.

Timothy Peterson: She should make brand names. I'm gonna hire her. That's it. She should make brand names.

Erik Martinez: I'll tell her she's got a job offer

Timothy Peterson: That's really good actually. I like that. I want it right now. I bought it.

Erik Martinez: You heard [00:23:00] it first here, folks.

All right. Before we lose all the audience,

Timothy Peterson: I know.

Erik Martinez: As you're running these organizations and providing guidance and giving them direction. How are you prioritizing what AI initiatives the organization should go after?

You taking a pray and spray approach? You taking the shotgun approach? You taking a rifle shot. How are you guys doing it?

Timothy Peterson: I'm shooting it all

Erik Martinez: He's just shaking his head all over.

I'm not doing any of those things, Erik.

Timothy Peterson: I'm getting the machine gun, all of the stuff.

No, I am approaching in a non AI kind of way. In a way. I just wanna, again you take the skills that you have and you take the approaches that you have for other things, and you can apply it.

So I'm basically saying, what's short term, what's medium term and what's long term? Like, what are we thinking is really going to be useful to this business or critical to this business in the next 90 days versus later versus eventually - that's one way. And the other way is you're kind of [00:24:00] cross-referencing it with, well, wait a minute, which of these are really gonna give us a bang for the buck?

Is this gonna change the way that this business makes money? Or how quickly the business grows? That's a key thing. And we started off talking about like personalization at scale or whatever term you might want to use for that. If it really means this is the key to that particular business and it's the core and it's the way that they're gonna be out in the world, then you're gonna move it from longer term or medium term to short term even if it's a pain in the butt, it costs a lot of money because it's gonna change that business.

So it's kind of those two different thought processes. It's short, medium, and long term, and what's the impact? Is it gonna really change things for us, in efficiency or money?

What's gonna happen.

Erik Martinez: It's interesting you say that 'cause I've been doing some pilots with a couple of companies and we're interviewing their teams to go through and figure out what their processes are. And you know, as well as I do, the [00:25:00] smaller the company, the less likely the process is written down.

Timothy Peterson: Yep.

Erik Martinez: And the bigger companies, it probably written down, but it may not get updated. And if you talk to three people in the same department or the same company and you ask 'em about the process, you're gonna get probably three different answers. And I would say that's mostly true. It's not always true, but it's mostly true.

Of course, communication's still kind of the number one challenge in any organization. From sales team or a customer service team down to the operations team or a customer service team to the marketing team. Not enough information is flowing to really address fundamental problems.

And that's a process and a workflow issue. So one of the things that we've been trying to do is figure out, okay, well help us unpack. Where you guys may have misunderstandings in your process? Partially 'cause they're not documented.

And partially because like all of us, we're [00:26:00] doing things every day. We're busy doing the work. And sometimes it's a little bit of effort to pull ourselves out and say, okay, is that the best way for me to do my work? And so what we're trying to do is help them unpack their formula for whatever it is they do, and then say, how do we intelligently integrate tools?

They can be AI or they could be conventional. I'm all in on AI, but I'm not all in on AI for AI's sake. Because there's certain things, I was talking to a creative the other day and she's just like, if I could get an AI who would go to my meetings for me so I can just sit there and create. Well, what's the most valuable thing in that whole statement. It like hit me full force. The most valuable thing that she does is be the creator of something and their process gets her bogged down and the other things that takes time away from her doing what she's really great at.

So how do we apply a [00:27:00] process and tools to help her solve that problem? And that's just one simple example. I'm sure you can come up with like 25 million examples of things companies can do to kind of unpack what they're doing on a daily basis and say, how do we do this a little bit better with an outcome in mind? It's kind of the three things, right? It's quality, speed and price at the end of the day for the consumer. Whoever that consumer is. Well, we used to always say, you can only do two of the three.

Timothy Peterson: Mm-hmm.

Erik Martinez: But I do believe with these tools and proper thought that we can actually make progress on all of those.

Timothy Peterson: Yeah, I think you're right. I mean, but you know, again I always wanna find the simplest way to just kind of respond to it, because, we could always go down that rabbit hole and talk client by client, company by company. That's what we do, right?

You go into the weeds and you figure it out. But I think in broad strokes what has to happen is, I go into companies [00:28:00] and I say, what do you do? And the answers could be so different from person to person. That is the first issue that has to be cleaned up. And once you say, we are doing X, and it could be anything, it could be, we're making this type of supplement to address these types of needs for this type of consumer.

If you all agree on that, then a lot of the other things start becoming simpler because they're like, well, we don't do that. That's outside the circle, it's outside. It's not what we really do. And then the processes, they simplify themselves. You realize that you were bogged down in something, but that's not core.

Or you took on a responsibility that really doesn't have any relevance to, driving revenue or gaining customers. So a lot of times in your interviewing of internal people, you're really matching what is gonna make everything work externally with the consumer. So I always say you have to do both [00:29:00] simultaneously.

You get questionnaires, you get surveys, you get focus groups, whatever. You gotta call 'em outside and inside, so I go into a rather large company, multi-billion dollar international company that I was working with a while back and, they had a lot of questions about how they were advancing, their technology and how they were really growing internally and a lot of questions.

And I said, well, who are your top customers? Like, who are they? Give me a number of those that I can actually talk to without you sitting there. Who can I talk to? And then the customers basically say, well, I could spend 50 million more a year if you did this. I could spend 8 million more a year if you did this.

And I was like, guys they're gonna spend this much more, but you don't do these things. Your process is so cluttered, or you're not approaching online, you're not approaching service, whatever it was. That's what I keep bringing back for smaller companies too.

Talk on both sides. Try to say, what do you do? What do [00:30:00] we really do as a business? And simplify it. And the processes will kind of clean up on their own. And then you just keep going further and say, well, what tools would make it even better? And is AI, gonna make it better? Or is it just something else we have to learn for the moment?

Because AI isn't the answer to everything, as you said. It's not yet, it's not the answer to everything.

Erik Martinez: It's absolutely the answer to everything.

Everything.

Everything.

No, it's funny 'cause I had interviewed a while back, a gentleman named Mark Maynard and he was talking about the power of purpose in business and you just articulated what he said in a very different way.

Timothy Peterson: I'm sure he heard it from me.

Erik Martinez: I'm sure. But

Timothy Peterson: Mark. Hello, mark.

Well, yeah, I mean, thank you. Thank you for saying that.

Erik Martinez: Yeah. 'cause I think sometimes we get lost in the weeds. My purpose is I'm doing a marketing campaign, but you're doing a marketing campaign for who?

Timothy Peterson: Yeah.

Erik Martinez: for what purpose?

Who are you [00:31:00] serving? Why are they buying from you? I was just having a conversation with a client this morning about their whys, why are their customers buying their products and trying to reframe some of kind of the more traditional thoughts around that.

So, as we think about AI in terms of priorities and budgets, and we were talking a little bit earlier about training and technology. From your vantage point, how do we take our limited budgets- 'cause even though we may be pouring more money into AI, whatever that means in your organization. How do we properly distribute it so that we can move the needle forward on leveling up your team. Making progress with technology, and then choosing tools.

Timothy Peterson: So I think the first answer is that the budget goes entirely to Erik and Tim, and then entirely at this [00:32:00] moment, entirely. And then we decide, right? That we make the decision,

Erik Martinez: We make it really simple for you guys.

Timothy Peterson: It really simple. But aside from that idea this answer's gonna change.

So if people are listening to this podcast in 2030 and they're on Mars, right? It may be a very different moment in time and a different answer. But right now I think that I would spend more money on training, upskilling, whatever terms you want to use. And I think you captured it very well there, it's like AI, like whatever it is and that kind of thing.

A lot of people in companies, they know the term, but they don't know what it means in their day-to-day lives, in their jobs. They don't really make those connections. So you have to get to a certain set level where everyone at least understands, some basics, everyone has to.

They have to understand something. After they get to that level, then you're gonna have more people who become expert in various aspects of it and are resources for the company and recommending [00:33:00] tools and recommending paths and whatever. But I think the majority of your budget, or a big chunk, let me just put it that way.

A big chunk of the budget is gonna have to go to upskilling training, learning, teaching, starting the simplest way, like we said with lunch and learn. So if you need to, whatever it is, that's number one. Number two. I'm gonna take a leap, but it really is testing, piloting, trialing. I am going to challenge, and I do this, sometimes I'll go in and challenge people and say, well, what are you using in marketing?

Or What are you using in, customer service? Or What are you using in the warehouse operations? And they could be using one thing, or maybe they're not using anything. I'll say, well, I'm gonna challenge you. You're gonna have to do some research and you're gonna have to find things to test because if you don't test, you'll never learn.

If any of these things are actually gonna help you out. So if you need me to help say what the top three are for X, to do something, then I'll do that. Otherwise, maybe you should do the [00:34:00] research or you've done your level of research that you can go choose three things you want to test and you make a case for Y what's it gonna do?

That's another, so second would be testing, piloting, whatever. And third, I would say it's the bigger picture stuff, but that's more expensive. It's like infrastructure, changing the business, massive kinds of projects for AI. That's really third on the list at this point because most companies aren't there yet.

They're not there yet. They don't know enough. They haven't tested enough. They can't afford to just say, we're gonna spend a hundred million dollars on this new AI project 'cause they don't know anything yet about how it's gonna work for their own business. That makes sense. Kind of the way I'm approaching it.

Erik Martinez: Yeah, I think so. You know the word that popped in my head is. We've gotta think of what the outcome is. And from your standpoint, it's training,

Timothy Peterson: Yep.

Erik Martinez: experimenting, or piloting, and then that bigger picture, whatever that bigger picture is.

Timothy Peterson: [00:35:00] Infrastructure

Erik Martinez: It's like learning to do math, right?

You can't add before you can multiply and divide. Well, you can, you could learn to multiply and divide, but it won't make sense without learning how to do basic addition and subtraction, right? So doing that training gives us that foundation to actually build upon and do the better experiments that could lead to better outcomes in that bigger picture scenario.

This is the way I would summarize what you just said.

Timothy Peterson: Yeah. And this is no different than what marketers should be doing. People in operations should be doing. You should be learning, testing, and then implementing on the big projects. So it's not different. It's that people aren't used to doing it for AI yet. And that's also a key thing to keep in mind.

It's not like you have to say, "Oh my God, what do I do?" It's not like that. You just start somewhere and you'll be better off than your competitors who didn't.

Erik Martinez: It's funny that you used the word [00:36:00] should. 'cause I coached Fast Pitch for a number of years, and inevitably when the kids are like 10 and 12, they're just so excited to do skill acquisition. I can catch the ball, I can throw harder, I can hit the ball harder, whatever it is, right?

And then as they move into like. They're 14, 15, 16. They're like, " Oh, I wanna play for Oklahoma." Well, why Oklahoma? Well, they're obviously the most dominant college softball team in the last decade. So they start naming off all these big names, schools. I'm like, okay, great. How are you gonna get there? Well, I need to play for the best winning travel team ever. No. What you should be doing is improving those skills. If you're not the fastest base runner, can you gain a little bit of extra speed? Or can you learn how to run the bases a little more effectively? That reduces your chances of getting [00:37:00] caught.

If you're a pitcher, can you work on your rotation and your location? If you're, whatever it is in marketing, it's still kind of comes back to those fundamentals. Like, what are we doing this campaign for? What are our objectives? How do we get there? What tools can we use to help our customers make a better decision?

How do we make it easy for them? How do we reduce friction throughout the process? And I think the reason I kind of picked on the word should is I think there's lots of things we should be doing, but I'm not sure in today's environment that marketers are so overwhelmed with lots and lots of different things.

I still feel like I had a lot of things to do 25 years ago. I feel really bad for the marketers today.

Timothy Peterson: I'll give you an answer to that.

I'll give you an answer. I mean, no, I'll, and this is a very clear answer 'cause I've gone out, and I mentioned this early on when you asked me what I'm up to like a little summary, right? One of the things I said in my summary is I go into companies where I refresh or [00:38:00] reboot and there's something.

It's gumming up the works, they're not thriving. There's something that's wrong. There's something that's missing. Often and it's not every time, but often it's because people are trying to do too much. Marketers are classic examples of this. Doing everything is sometimes doing nothing well, right? I mean, that's really unfortunate, but true.

You could be a great marketer, but then when you get to that point of overwhelming, like where everything is happening and zooming around and you don't have enough resources and the budget's flying left and right, and I get it. I've been a top marketer. I get it. It's very tempting.

'Cause people come to you and say, why aren't you doing X? And again, I keep saying X, but I don't mean the, the old Twitter. I mean, why aren't you doing this thing? And I really at this point tell people they have to say because I'm doing too many other things.

That's why. I am not doing everything. I'm going to choose the three of this and three of this and three of this because I can do nine [00:39:00] things or what have you. So that, I think is a way to approach this as well. When I say should, I don't mean that we need to do every single thing in the universe, because companies aren't supposed to do, every single thing in the universe.

It's like, who are you as a company? Doesn't mean I make everything for everyone all the time. There's no company that does that. So you shouldn't expect to do that in your department, in your role, and addressing things as important as AI. You can't do everything.

Erik Martinez: I think that's really. Fantastically true. And I am a case study in all of that because I've gone through that entire cycle and have learned the very, very hard way that less is actually more.

But it's really hard for these small businesses with tight budgets and stuff to kind of hone in on one thing.

One of the things that was interesting about our marketing study, it was talking about different groups of people. But what I found really fascinating, Tim, was the notion that [00:40:00] if you are a person who is reasonably busy, there's only a certain amount of digital media you can consume.

There's a group of people who consume all digital media, and then there's a group of people who consume some. I put myself in that group, and then there's a group of people who don't. Like they're getting dragged into this. They don't really want to. But what's fascinating is in the two groups that are kind of adopting digital media, even somebody like myself, you and I may fit into the same category of this, but use totally different channels.

Timothy Peterson: Yeah.

Erik Martinez: But we're both in a target demographic for company X, Y, Z. And there's like 50 channels to do, but I only have budget to do three. But if I wanna be in all 50 channels, I then take my really small budget and I subdivided it 50 times and now I'm not effective. So to kind of illustrate your point about if you're trying to do it all, you're not being effective anywhere.

Timothy Peterson: I'll give 32nd examples of, from a couple companies I've [00:41:00] worked with. One is a major player in supplements and they - how do I put this without naming them, they do products that are like performance enhancing sport products, whatever supplements . But they had so many products and basically.

They decided to zero in on a fewer products, but to have a minimum level of like $60 million of revenue coming from each of these products. And once they did that, it really changed everything for them. It made them much more focused. Everyone was able to achieve more. They also reduced the number of marketing channels they were in.

The problem was that they were doing so much. It's not that the product was bad or, nothing was bad. They were doing too much. So that's one. The second one I think is funny because it's a pandemic story. It's a company that was making a lot of travel gear a lot of bags that were really funky and particular, and like many zippers and pouches and whatever, very specific, like different sizes of laptops and for your iPad and whatever, great stuff.

But when the pandemic came and everyone stopped [00:42:00] traveling, it's like, well, what do we do? It became a weird thing for them. So they were very smart when they decided to pivot and they made things like more diaper bags or whatever. They pivoted really well. But then the pandemic ended and they're like, well, now we can do diaper bags and travel and then they started to have problems because they had totally lost their focus.

So the pivot was admirable because they adapted and they survived. That was really admirable. But you also had to say, well, wait a minute, we're a travel company. And they had to go back to that and the limited number of channels they work in, and now they're thriving again. So you've gotta just focus it.

It's the product, it's the channels, it's whatever you're doing. All these campaigns, you can't do everything. You're not Amazon, and Amazon doesn't do everything.

Erik Martinez: That's true. Even though they try,

Timothy Peterson: Even though they try,

Erik Martinez: Even though they try. So, as we kind of move towards the end of this discussion, ' Cause I could talk to you for hours.

Timothy Peterson: I would love to.

Erik Martinez: We could talk for hours. We're probably gonna have to just do [00:43:00] this again.

Timothy Peterson: We might have to. Yeah.

Erik Martinez: If we bring this back into the realm of AI I think, the key question for you now is, "Hey, you've given us some great ideas in terms of, how to potentially allocate your budget for AI within your organization." Some things that you should be thinking about in terms of governance of AI and AI priorities within an organization. As companies start to work on these things, what's next? If you had to say, okay, you're starting work on those things now think about this. What is this?

Timothy Peterson: I'm gonna give a couple quick answers because I think that, again it's business specific. It might be that it depends on the projects that you're launching into. Let's say you're leveling up the training, and you're testing and you're selecting some things that are really winners in these different areas.

You may realize the biggest win is in how you [00:44:00] approach, whatever is happening in your warehouse or whatever is happening in other aspects, operations. It could be a lot of different things. But I think that really what's next is you have to take a step back and you say, what are the analytics?

How are we going to deal with this whole new world. We've tested, we're committing, we're going forward. How is it changing consumer sentiment? We talked about brand early on, and the risk. How is it changing things? Are people liking us again or liking us more? Or are they just kind of indifferent?

Like, we invested all this and it didn't really change the way customers feel. They don't feel better. How is it changing conversion? How is it changing? Lead gen, if that's an issue. How is it changing- revenue generation. On and on. Pick those different areas that you're testing and you're learning and you're applying AI.

Well, now what's the result? If you don't do that part. Then the other part could be wasted and it's time and money and [00:45:00] people and all of this that you would be, risking. You wanna thrive, you want to keep people employed, you wanna have successful businesses. You've gotta have processes in place.

And most companies do have some sort of, good internal, analytics team or whatever you want to call it. But it has to be even better because you're gonna have to figure out the impact of all of these different things that you're up to on those areas I mentioned and more, every single one of these areas. Even just a attracting employees, I had a conversation with a company about this just last week.

It's like, if you are doing all of these hot things and revenue's going up and conversion going up. Do people know out in the job market? Or is it just a consumer thing and an internal thing? Because you'll get even better people. All the time. If they know that you're actually at the leading edge for your category. So if they don't know, then that's a failure too.

Erik Martinez: Wow. That was a good answer.

Timothy Peterson: I'm glad you like it. I made it up just right now.

Erik Martinez: [00:46:00] Honestly we talk about metrics all the time, but I think at this point, most companies are just like, " Oh, AI equals automation equals efficiency improvements." And I think that the conclusion of this conversation and all the other conversations I've had on this topic is really it's just part of the ecosystem now.

It's just another tool set. And it might be a tool set that has more impact. Than other tool sets could, and that may have deeper reach into more parts of the organization. I think it's kind of funny when I think about e-commerce as a business, and I can tell you over the years, and I'm sure you've seen this, nobody knows where to put e-commerce

Timothy Peterson: Yeah.

Erik Martinez: in their organization.

Timothy Peterson: Yeah.

Erik Martinez: Some people put it into merchandising and some people put it into a marketing team, where I think it belongs personally. Or, honestly even if you are a direct to consumer only and you have no brick and mortar, your website is a store and it needs to be [00:47:00] run like one.

Because it involves every single department in your organization, IT, creative, merchandising, marketing, human resources, operations, all the way through the whole thing. Your website is a compilation of your entire business. And so today, I think AI is gonna have that same kind of impact within an organization.

It's gonna touch every single department and every single piece of the operation. And every single process in some way, shape, or form. It may not touch it directly, but it might influence it. And so we need to start thinking a little broader, a little more holistically about how to implement processes and governance and measurement of success.

What is the measurement of success for training? Well, if I upskill all my people and we grow in revenue the following year, was that the reason, probably part of the reason.

Timothy Peterson: Part of the reason. Yeah.

Erik Martinez: But how do you measure that? So, I [00:48:00] think you made a great point there. Tim, as we move the close, is there any last piece of advice you'd like to leave listening audience with?

Timothy Peterson: Yeah. I mean, I always have advice. I maybe have too much advice, but I love telling people, all sorts of things based on my experience and the things that I see in the world - just sharing. And so one of the things that that I was sharing with some students recently is that you have to just be adaptable.

They're like, how did you become an e-commerce person when there was no e-commerce when you were in college? And I said, well, because I embrace change because I get excited about it. Because I'm adaptable. I'm willing to learn. And I feel like that is one of the biggest takeaways for life.

It's not just about this AI and, any of the other topics that we're talking about here. It's, if you shut yourself off and shut yourself down it's not gonna help you. It is not gonna help your career. It's not gonna help the companies you're working for or with.

So open yourself up to change. Open yourself up to possibility. [00:49:00] Keep learning and you'll be okay. I mean, you really will be okay. I'm gonna keep learning. I'm not gonna stop that until I have to, I dunno,

Like, whatever that is. Yeah. Until I course do, until people tell me I cannot learn anymore or something.

But that's, I think the biggest, takeaway is just keep learning, and embrace it. Embrace change.

Erik Martinez: I think that's a great piece of advice. Somebody wants to reach out to you. What's the best way to get in touch with you?

Timothy Peterson: My people can talk to your people, but I think really the easiest way is finding me on LinkedIn. There are many Timothy Petersons on LinkedIn. I want to tell everybody that, but Timothy J. Peterson, that is my LinkedIn Timothy, the letter J Peterson, Timothy J. Peterson. So, find me there.

Maybe I won't connect with you. Maybe it won't make sense, but I'd certainly be happy, to talk to you. I mean, it could be the start of a beautiful relationship. You never know.

Erik Martinez: Well, I know I've gained a lot out of [00:50:00] our relationship even though we went through a period of, I don't know, 15

years where we did at least 15 years where we hadn't talked. So it's been fun to have this conversation and I really appreciate you coming on the show and sharing some of your insights

Timothy Peterson: This was my pleasure. It was great to be here. Thank you so much. Thanks, Erik. I really appreciate it.

Erik Martinez: Although I think next time we have to raise our giggle factor.

Timothy Peterson: Oh, I think so.

Erik Martinez: Yeah, we have to raise the bar.

Timothy Peterson: I'll come with jokes. I'll be ready.

Erik Martinez: There you go.

Timothy Peterson: improv night.

Erik Martinez: That's awesome. Well, that's it for today's episode of the Digital Velocity Podcast. Thank you for listening and have a fantastic day.

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