Podcast Part 2: Global Trade and Gen AI with Ami Daniel

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In the second part of this series, Ami Daniel, Co-Founder and CEO of Windward, joins Host Brian Glick, CEO of Chain.io, to discuss:

• Global trade, job security, and the impact of technology
• AI-generated content and its impact on businesses
• The cost of capital and company growth
• The future of supply chains with emerging technologies

Ami is the co-Founder and CEO of Windward, a maritime data and analytics company bringing visibility to the maritime domain.

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Episode Transcript

Brian Glick  00:05

Welcome to supply chain connections. I'm Brian Glick, founder and CEO of chain IO. This is part two of our conversation with Ami Daniel, who is the founder and CEO at Winward. If you haven't caught part one, go check that out should be right before this one, wherever you find our podcast. And in this episode, we're going to pick up with some extended conversations around Gen AI, and the capital markets and some other really fun stuff, including what we're excited about for the future. So hope you enjoyed listening in. And this will be the conclusion of the conversation.

Brian Glick  00:50

That global trade thing, I was at an event recently, and there were a couple of very senior people from the US government or just left the US government. And they were talking about kind of the broad arc of the 90s, the 2000s to 2000 10s. And where we are today, and they took the position almost as an assumption, almost as the starting point of the argument. Oh, we all thought global trade was going to fix everything. And now it is clear that global trade completely failed, which seemed very extreme to me. Because I don't feel that way. No, I don't feel that way as well. But I heard to some, like very, very smart and relatively famous people saying this, it sounds like you think they're overreacting.

Ami Daniel  01:31

I don't think I could have fixed ever everything. Because global trade doesn't fix ideology. Right? If my ideology is you should be dead, and I should get everything you have clean. No, that's not gonna get fixed by selling toys. However, I think good quality of life incentivizes people to live peaceful in a peaceful way, because you have something to lose. And that my friend is an outcome of local trade. Because the easier you can import and export, and trade in the free world, and cost of selling it on the other side of the ocean is more normal. And there's less friction, the more peaceful and stable the world is. Because, you know, if you don't have wheat, you don't have bread. Well, that's an issue. So I think global trade and frictionless global trade underpins everything we have. Think of it like Maslow, you have the pyramid. So if you think nothing of the pyramid of life, right now, obviously, here downstairs is Wi Fi right to take Wi Fi, we all die. But otherwise, right? The security. So I think that's food security, and that, you know, financial security? And did you start security. And as somebody who's lost a lot of insecurity over the last 52 days, I can tell you, when somebody pulls a rug under you, my friend, you fall big time. So I think just the expectation of little trade to fix everything is just disconnected from reality. So if you have irrelevant expectations, you know, don't be surprised to get disappointed, but perhaps just set the right expectations. It's part of it, but it's not all of it. So

Brian Glick  03:02

that's security, and that, you know, like having a job and you know, a thing we went through here in the US over the last 60 years is a lot of the jobs. Sure things like mining and what have you, there was always this discussion of oh, well, in net, we're gonna have the same amount of jobs, but they're gonna be distributed to different people, right, that the person who is doing the mining is not the person who moved into the automotive manufacturer, and then eventually it's really accounting for AI, generative AI now you have a lot of thoughts and that people are seeing that as a threat to certain people's stability, but like kind of where's your head around AI?

Ami Daniel  03:40

First of all, I think every technological breakthrough is threats to people's stability. I agree completely. However, you don't have a choice. Nobody has a choice, right? It's like great. Let's say it's a threat. Now. What? Nothing, our phone to stability to pigeons? Probably. Yes. You used to send letters with pigeons. Actually, maybe it's a benefit to pigeons, I guess. Right. Pigeons like to send all these letters out? Yes, absolutely. Phones and the telegraph or threat the pigeons? You find the job security of pigeons, and prints sent to anybody ever phrase it this way. But yeah, Jenny, I, first of all, I think it's take a step back, you know, especially in logistics, by the way, but in everything. We have so much unstructured data. When I say unstructured data, I will say contracts, words, emails, everything that is not a table, are you most of the technology people use SAP for instance, it's basically a bloody big table with a lot of functions on it. But SAP takes everything you have in life, all the SQL and so forth. It puts it into a big table and allows you to make create actions on it like query this query that check this check that that's great, beautiful. I think generated Vi has the potential to take all the rest of the world which is the documentation, the bookings, the emails, you know, the PDFs, all that and have the same effect that you can have today. You know, putting everything into a big table on And nowhere it is more relevant than logistics where, you know, I spoke to one of our customers this week, and I saw, obviously, you know that right, but what does it take to move a box? Oh my god, I saw that quotes in five languages, and three currencies, and five tariffs and three agreements. And it's one box, one box, one box, you know, they do three and 1000. That's one box. Just think of the scale. So I think that's what gets me excited. Is it a threat? Yes, absolutely. Now you have people reading that. And manually doing it, like reading this document in colony, this guy and this guy and so forth, of course, can be automated. Absolutely, yes. However, I think history shows. And by the way, most of the executives I meet all say to me, we don't like cost reductions. So what is your response to that comment? Like cost reductions? No, it's funny, right? Because they never end up as cost reductions

Brian Glick  05:54

Yes, if no, I've seen this argument. Yeah. They don't like you justifying your ROI by saying, Oh, you're gonna remove three heads because they never get rid of the three people.

Ami Daniel  06:02

Exactly. That's the point because of labor laws.

Brian Glick  06:06

I have personally kicked people out of my office. Yeah. For coming in and saying my software is gonna save you three people. I've watched the CFO did this one time, he literally looked at the sales guy and goes, which three? Yeah, exactly. What are you gonna walk over to the desk and fire them for me right no

Ami Daniel  06:20

I think I can save you 10 hours a week. But I think life is that especially by the way, the logistics, these are hyper specialized people, they might be working for you for 17 years, you save one thing to do, you may create three other things to do you want to use it more efficiently. So I've seen people say that they don't trust promises for cost reductions. They trust, you know, things they can collect revenue to, that's a very, very different thing. So in my view, generated absolutely is a threat, but you don't have a choice. So if you can't beat them, join them. I gotta say, I think most of the people I've saw using looking at products for generating vi are pretty shallow. Because we're like, Oh, my God, let's use LMS. For what? Let's do a chatbot. Okay, great. Chatbot. For what? On our website? Let's do a chatbot. Great, what's the value? What do you mean? What's the value? There's Chatbot. So I think that's not necessarily the right thing to do. I think you should have a bit more imagination for that. But that's just hard work.

Brian Glick  07:13

We actually literally an hour before we're recording this, we were having a strategy meeting for us for next year, and somebody was discussing threat of AI chat, but we didn't decide to build a chat bot. But there was this discussion of like, what's the threat for AI to our business as an integration company? And, you know, the discussion we had was, Oh, my God, if we were selling the world's simplest integrations, huge threat. But it's the difference between driving a self driving car on a course. And on the road, when these things hit the real world, it's a lot more work than just writing the code. Right? So yeah,

Ami Daniel  07:50

of course, 100%, for what it's worth, and I think most people don't get it. They're not many actually, Gen AI products, which make money right now. Because it's usually expensive. So I think when building a product need to understand it, I've seen a company, by the way, in the space that has a great business that sells for $2 A box, but it costs them $5 boxes serve that. So you know, obviously that's a chai see

Brian Glick  08:15

a flaw on your plan? Yes, that's,

Ami Daniel  08:17

well, obviously, by the way, the investors who gave them whatever, you know, just short of 100 million didn't see that flaw. Because the projection said at some point, it's going to flip. And it's going to make a lot of money, simply that some point was, you know, I guess, down the road, and they never got to that road, and nor can I see that road right now. Right. And I think that's also consideration when you build a generic product, what is the problem you're solving, you need to make sure that the customers will be willing to pay enough for you to make money. Because I understand why it's good for open AI, I just don't understand what's good for me. And by the way, the second threat is for companies because if you don't have a deep product, I think Gen AI allows enterprises to jump a few levels or skip a few levels of innovation. Just throw an LM on their data lake and ask questions. And that will kill a ton of startups. So if your product isn't doing something unique, sophisticated workflow wise, so forth, but just organizing data, I think that's also a huge threat for you. But equally, you know, we signed up to a platform engineering platform on our internal data for us. Because I think you can be about 30% more productive. And if you think about, you know, the cost of capital and so forth, then if you can get 20 or 30% or more of your people, maybe you can make more revenue, that's got to be a good deal. So I think that's also another one of the opportunities, I think, yeah,

Brian Glick  09:34

and I think, you know, we're kind of in the same boat where we are using some very successful jenaya tools really the off the shelf ones, but yeah, they're individual tools. Yeah, but they haven't changed yet. The processes we do so okay, I need to code something. copilots gonna help me code it faster. Yeah, sure. But I haven't changed the whole concept of the fact that I still need a developer. And I think that's the jump that people We'll don't realize how far we are between the sophistication of the tools today. And oh, I'm going to fire all my developers and just type in like a thought and there's going to be a company. That's the hype cycle that's going on right now out there a little bit, I think, you

Ami Daniel  10:14

know, there's a good book called The coming wave, which I liked about AI. Mustafa Suleiman is the founder of reflection AI. And I think he talks about the convergence of Gen AI, and biology and looks at what can this do. And I think in next five to seven years, it can do a lot. Having said that, by the way, things are moving so fast that I spoke to a few people who've been building things since Jan, that the right now are obsolete three times. So when do you get into the race? And at what point and what size of company are you, in my view, that's the right time to get into the race. Assume you can build a product that adds value, otherwise, just add cost. Basically, if you just add a chatbot, or your data, it consumes like 50 tokens per query, you're just gonna pay more and kill your margin with a high cost of capital, you know, so you need to be very careful, but also very imaginative. I don't know if that makes sense. So let's

Brian Glick  11:06

talk about that high cost of capital for a second and the market and the world that we're living in? Sure. Because Can you explain for the people who are not founders, or who would maybe don't have to sit with finance every day? Sure, the impact of what that means that the cost of capital has gone up to our industry,

Ami Daniel  11:26

it's very simple. By the way, I can also tell you an SMP, but basically, you can put your guards in a bank and get six or 7% interest rate with zero risk 00 Nothing at all, and have it pretty much liquid. That creates an alternative, which is quite solid to alternative investments or to stocks investments. Because if you look at the s&p 500, and you take out this Magnificent Seven, it doesn't make much more than 7% A year 8% year, last year was awful, by the way, this year is good, but again, take them out. And it's very weighted towards Microsoft and Google and MIT and so forth, and Vidya and Tesla. So that means that there is less will to take long term investments like VC, which are not illiquid, because if I put money in Chennai, oh, I need to wait for your exit, that could be next year, it could be three years could be 10 years, I didn't really know. And maybe I have a safer bet. That is liquid. So less people want to invest in VC money, or in private equity money, and their hurdle rate. Because in private equity, for instance, they have a hurdle rate, which only above that they get paid a success fee has gone up to like 12%, because of the interest rates, and something's called IRR. So that means it's hard to raise capital, by the way, also the public markets, you need to be a better company to do that. So in the VC model, companies used to die basically in the VC model means out of every 10 investments, one or two is tremendously successful, six, seven die, and there is a couple that are like okay, in last 12 years, none died, like none, they always found people who are willing to put in more capital and because the cost of capital was zero, so you didn't have an alternative investments can make six 7%. So we were looking for that, right? The markets kept going up. So it kind of was a cycle that was more money, more money more money. The outcome is, it's harder to raise capital, you need to look at the unit economics, like how much does cost you to acquire a customer or the SDR phenomenon, which is just raising the cost of sales. So all these fundamental economics, the rule of 40, which means EBIT up plus growth needs to be 40% is becoming popular again. And that's why you see the pursue of unlimited growth, you know, going away a bit, because that influences everybody, because everybody in the market becomes more capital conscious, more investment conscious, because the valuations are depend on that they have less capital, that's valuation. So in the public markets, you saw them in NASDAQ growth companies, the according to I think it was JP Morgan, the growth haft from 38% On average couple years ago to 19%. Last year, just haft why? Because the cost of capital is higher, people buy less. There's also a bit of recession because of that, because people are not spending their money. They're putting in the bank getting 6%. So all of this is interconnected. The outcome is if you're a company, which is not well financed, you might die. And a good example, by the way is Nautilus labs. And I know the company, I think very highly of them. They're great company, they're in the shipping space. They're doing decarbonisation fuel consumption, we just acquired kind of in a last minute sale by Dan lick, which is a Danish company. And I suspect you see more of these, unfortunately, it's not an amazing exit ticket. I think they're a great company and very smart people. But you know, sometimes just tough.

Brian Glick  14:41

I think one of the things that I've noticed that I didn't understand when I raised money for my company, and that I think a lot of people don't understand is that the hidden third party in VC transaction is what's called the limited partners which are usually a pension fund, you know, a huge pool corporations, somebody's got a lot of money that they have to invest. And those are, when you ask like a random person on the street, who may be generally aware of what VC is, you know, they'll say, okay, the venture capitalists invest in companies, that's not actually true of venture capitalists just direct the money from these big pension funds to companies. Right. Like, it's not their money that usually that they're investing, right? They might be a little bit, but it's this kind of very cold world of talking about the percentages of interest in whatever is what matters to the venture capitalists when they have to raise their money. Sure. Right. And and the amount of people who want to invest in that, of course, yeah, and I think the public perception is much more of that venture capitalists are gunslingers than they really are. Right? Like,

Ami Daniel  15:51

oh, and by the way, I think you look at Ethiopia, which is a public company, it's really interesting, I think to open you know, right now, the stock is three point something, which means like 1,000,000,002, but a quiet bluejay for 1.7 billion. So just one acquisition out of like 50, or 60 is more than the market capitalization now, right? This, that single one. So I think that all the metrics have changed, which I think people have started talking about last couple of years, which is kind of our mantra sustainable growth, which is how do you grow in a sustainable way, you'll hear a lot of cash, you have a healthy business with margins. And I think it actually changes the way you run the company. Because you're more cost aware and more capital aware. I'm hyper capital, where about every dollar? I think it's the right way to run your business, by the way,

Brian Glick  16:38

as a mission driven founder, right, both of us. I think, for me, at least I've said a couple times this year, I prefer to operate in this environment. I didn't know it's harder to sell. But emotionally I prefer because things make sense to me. Yep. Because people who are being successful are the ones who are being paid for the value of that their product is producing. And that in my mind, makes a lot more sense, then people are being paid based on the value of how well they can tell the story about what their product might produce someday in the future. Yeah.

Ami Daniel  17:11

But that's also not because of cap rates. That's, I think you're operating in logistics area where COVID was really like, yeah, yeah, I think. So. I think I think that also that outlier, I think, broadly saying technology. And I've seen this through a few industries sometimes had a lot of promise, and also a lot of disappointment. So I think what you're saying, I'm saying this in the visibility space, where a lot of people, you know, I know, see this company who did pay $600,000 a year, and they haven't integrated data, because they can't, for two years, so they're paying the check, but aren't even using it. That doesn't make sense to me, Are people getting data and translating that data into an outcome? So I think what many traditional industries don't understand is that when you buy technology, into change how you work, and that's the job of the CEO, or the CFO, or the CFO or the CTO, to just buy stuff and change how you work. That's just a waste of time. And also the tech companies, it's their job. And I always reference to my sales guys, you know, Challenger sales, I like to book challenger sales. Because like the type of thinking because it's about partnership with your customer, and what are the outcomes they can achieve? And when they're successful, we're successful horses here, he's a product come, you know, sign this sign this sign this because they end up getting disappointed. It's always bad for the long term. I always play the long game for good or bad.

Brian Glick  18:26

I agree. Kind of to wrap up, like, what are you excited about? Whether it's with the company, whether it's with the industry, anything kind of like what's got you jazzed up? Yeah,

Ami Daniel  18:34

first of all, I'm moving to London with my family that gets me jazzed up before the Gen. So it's a fresh way to look at the world and you know, fresh opportunities, fresh area, you know. So London is a great place, also for AI. So I'm jazzed up about that. But I'm also jazzed up about just the opportunity to build I think right now, with the revolution of generative AI, I think there's so much opportunity to enhance and improve things we've done previously differently. So I'm really invested in that because I think you can build a new generation of products to solve completely different problems based on the platform we've built. So I'm jazzed up about our size, a couple 100 customers, it's much easier to build a product that way, by the brand and the ability to build a global business. I also think that I just feel more comfortable and confident than I was before getting to where we got today. And I think this has been our best year ever. I'm jazzed up about the opportunity to build more and make a bigger difference. And I think on the global stage, that's super exciting, because it's just the right time. A lot of people try tech, they're disappointed. If you build the right value proposition you've partnered the right way. You can make a huge difference. And maybe I'll just reference that and I'll finish that up. I had a really interesting conversation with a PE A couple weeks ago and make me so what do you think about supply chain? He said we use a supply chain. What do you mean they'd said, What do you mean we mean stuff and containers and I said, Well, I think of supply chain differently like the cargo grain in a bulk vessel is still supply chain because it's used to make bread. So I think viewing the world through these glasses of supply chain is everything that moves raw material that ends up as a finished product source to sold and the understanding of how to use AI to improve that reduce friction. That's a fresh perspective not many people have and I'm super jazzed about it. Just the fact that there's a lot of opportunity in the world, you know,

Brian Glick  20:24

that is an awesome place to wrap in. Really appreciate you taking the time. I know it's been chaotic on so many levels for you lately. So we're genuinely appreciate you being here and sharing all this with us. And I could probably just your last three sentences there. I have another hour's worth of stuff I want to talk about, but we'll save it for another time. Save it for a beer, my friends. And yes, it's again, thank you so much for being here.

Ami Daniel  20:46

Thank you so much

Brian Glick  20:48

Well, thanks again to Ami for a just tour de force conversation across two episodes here. Even after we stopped the recording, he and I were just continuing to chat and so excited to talk to him more about all of these topics. So hope everyone enjoyed it too much for me to summarize here in a short little bit. So we'll have again links to where to find more content about Winward. We didn't really get into too much with the company does but we'll have the links there for you. And, again, thank you for listening and we'll look forward to chatting with you next time.

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