SPEAKERS

Kyle Mountsier,Paul Daly

Paul Daly 00:26

I guesswe're not running the video today. We're talking about money, money, moneymoney, because that's what they're talking about on the Thursday, cryptofederates and straights blockchain. Yeah.

Kyle Mountsier 00:41

Moneyother kinds of money's Money.

Paul Daly 00:44

Money.If you're under three, it's money's plural. Talking about money's today. Wedidn't run into video a week, we didn't run it today. But look, you knowalready. It's like a few days away. Now may 9, we're having a party in Tampamore than a party more than I feel like it's totally underselling it by callingit a party. This is not an after digital dealer mixer, where you going to standaround your little cocktail table and you sip on your rum and coke is isn'tthat kind of thing at all. This is like, think of it like South by Southwestmeets an automotive conference meets meets. I don't even know

Kyle Mountsier 01:24

somethingthat you've never even seen before. That's what we always go for it meetsretail pop up shop. Yes, exactly.

Paul Daly 01:30

So ifyou haven't gotten your tickets, get them they're selling faster than they'vebeen or being claimed faster they've been if your dealer you don't have to paybut you still need to register a ticket our friends at Auto Five paid for allthe dealer tickets in advance, however, you need to go to a so to.com andregister your spot because once the tickets are gone, they're not going to letyou in. And I'm saying that with the the most grace I can we want to be able tolet you in, especially if you're listening to the show you should be in youshould be in. Yeah,

Kyle Mountsier 01:58

come on,like just fly on down there for that if even if you're not going to digitaldealer just come on, it's going to be so much fun. And you know, I we encourageyesterday, just the idea that there are so many incredible people that will bethere between dealers, and industry partners and thought leaders in theindustry dealers that are doing incredible things are one of the people thatwe've talked about and had on the show, Patrick Abad, Brian Kramer will betheir legend, you can you can literally just ask them questions. And they areopen books, which is what I love about this industry, there are so many peoplethat are willing to just like feedback and give encouragement and give bestpractices in real time. And that's really the place where that happens is kindof like the outside of the conference pieces

Paul Daly 02:47

forsure. And we're even going to have some other outside automotive industrypeople there because you know, savvy people like to roll with their savvyfriends. So we're gonna have some, like legit crypto experts there, we're gonnahave some legit people from other industries there. And the only way you'regonna get to talk to them, hear from them, whatever it is to be there. So bethere. If you can go to a soda.com register a ticket, I want to thank oursponsor, premier sponsor, auto phi. Our friends at name Ed actually bought thedrinks for everybody. So it seemed really appropriate because name Ed does knowhow to throw a party. They really really well. Friends at TrueCar giving awaycash, like it's gas money from TrueCar. So like we're never giving threegiveaways, we're giving over $1,000 in cash away. We are having a retail pop upshop our friends at upstart they have done an awesome job of just helping usget this retail Swag Shop to you. So you're gonna go in, you're gonna get asoda box, it looks like real money. It's so much fun. You'll be able to go tothe store and buy what you want with the money that we gave you. So it's free.You know how it works? Yes. All that to say it's going to be like nothing we'veever done before, and probably nothing like you've ever experienced before. Soif you're within an hour's drive, just just do it. If you're an industrypartner, and you have staff sales staff in the area, or you're going to be andyou're not going to digital dealer. That's okay. Call your dealers. Invite themout to the party. Be the hero,

Kyle Mountsier 04:05

right?Yes, exactly. We're

Paul Daly 04:08

justtrying to tee it up for you guys. We're trying we're making a small buddy triedto like hey, this is how industry collaboration happens faster. We innovatefaster. That's why we're so passionate about not only getting the dealersthere, but getting the industry partners there not only that so that everyonecan like Hawk one another No. We're trying to speed innovation by increasingcommunication became more clear, building more friendships and morerelationships because the Speed of Trust and the speed of relationshipsoutpaces everything.

Kyle Mountsier 04:39

Yesthing just does. Speaking of trust,

Paul Daly 04:43

oh, thetrigger buttons just not working.

Kyle Mountsier 04:48

Are theyjust going crazy today? So speaking of trust, yeah. beating up his. So, youknow, one of the things that we really get excited about every week is pitch.tank. And this week tell people a pitch deck is it's a it's a clubhouse roomwhere for three minutes, three different industry partners get to pitch dealersand and technologists and marketers on their product, how they might solveproblems for the dealership. And yesterday, the winner of pitch tank was TomKlein, the founder of better vantage point. And what I really love about whathe's doing is not just like building trust, but making sure trust is is whenit's gained, it's earned. And then and then repeated. One of the things that hewas talking about a lot yesterday that will probably continue to bring up overthe next five or six months is the gramm leach Bliley leach act that has somenew specifics to it on what dealers are going to need to do to make sure that theyhave the right processes, written forms, people in place to make sure that ifthings come up from a privacy perspective that they're taking care of. Andthat's something that he's doing to help out giving the consultative approachto that to make sure that dealers are protected, but are also like when youthink protected, serving the customer well, and he's got a really uniquevantage point. Interestingly enough, you know, better vantage point as being adealer owner, in the past. So he's got, you know, a really unique approach toit. And congratulations, we like to say to him for winning pitch tank, and boththe pitch and the product yesterday, bravo, yellow.

Paul Daly 06:27

Allright. Today, we said at the beginning of the show, we're going to talk aboutmonies today. Money's today, we look, sometimes financial things can likeespecially higher level financial things can be confusing to some new people tothinking about the markets and understanding how they impact actually real lifeand consumer life more importantly, so we're going to try to like just talkabout at a cursory level and bring some application to it. And then we're goingto talk about some crypto and blockchain. It's been a little while since we'vetalked about it. But we have a couple things that came up over the last fewdays that we think are important to talk about. And we understand that that canbe confusing to people that have been traditionally paying attention toexisting markets and existing currencies and existing transactions. So wereally live in this time when there are are kind of like two separatementalities moving forward and being forced to work together around what theconsumers want and consumer behavior. So we're gonna try to talk about it alittle bit today trying to make a little bit of fun. I mean, you've probablyheard about this already. And maybe you don't even know what it means. Butmaybe you do, the Fed raised interest rates by 50 basis points, aka half of apercent. That's a whole, that's a half of a percent. So this is, this is thesecond time only the second time they've raised rates since 2018. And this isthe highest one time bump and interest rates since the year 2000. Like, I hadno kids in the year 2000. Wow, that's

Kyle Mountsier 07:49

nuts. Yeah,I mean, just just the reality that we are seeing that much of a bump in theinterest rate in order to curb inflation is, you know, just you want to leanin, and you want to pay attention, because, I mean, I was talking to a dealeryesterday, you know, their, their their special interest rates from theirmanufacturer, you normally think of like 0%, point nine, their special interestrates for the top tier credit is 4.7% right now. So if you don't believe that,that's going to take another bump, headed into, you know, into June into July,then you're sorely mistaken. And you might actually see, you know, a mid monthbump on some of that stuff. So it's very impactful for automotive as it is forthe rest of everything, I mean, home home purchasing. And then you know,obviously, it goes all the way down into retail, because banks lends money totwo different businesses. And so everything gets, gets that kind of like bumpin interest and bump in, you know, the difference and consumer mentality. Sosomething definitely to pay attention to,

Paul Daly 08:58

ifyou're not familiar with it, here's how, here's how it all runs down the chain.Here's the macro economic principle behind it. First of all, this is the secondrate increase of the year, however, it's the second of seven planned increasesthat the Fed has already said they're planning on doing seven of these, right?So even if they bump it a quarter point at a time, right, we're adding anotherthree and a half percent to the existing interest rate. Here's how it works.When interest rates rise, then it gets more expensive to borrow money, likeKyle just said, so houses cards, credit cards, financing purchases, which isintended to slow down consumer spending. When there's less money available tospend, you make more prudent decisions. And what that is intended to do is toregulate demand on products right now inflation is soaring, right? It's at8.5%. The Federal Reserve usually targets 2% annual inflation. It's now what8.5 Right and it's probably actually a lot higher than that. Depending on thatdoesn't even figure in things like home prices fuel, right? That's like basic,basic groceries. Right? That's

Kyle Mountsier 10:06

acrossthe board. Right now it's 37% in auto or something ridiculous.

Paul Daly 10:10

Yeah.And you know what, you know what the fuel prices, it's so it's actually muchhigher than that. And so what they're actually trying to do is slow demand forproducts. If people buy less that reduces demand for products, and what happenssupply and demand balance happens when there's less demand, what happens toprices, they come down. But when there's hype more demand than there isinventory, guess what prices go up. So that's how, basically, the interest ratemodel works to slow inflation down, and they're in the middle of it right now.You know, our takeaway for dealers today on this is that, you know,affordability is already an issue. For vehicles. We've talked about thisseveral times over the last few months, affordability is already an issue, thisis going to increase that pressure, right. So I you know, we would say, lookfor other areas to help your consumer save money, and let them know that youunderstand that they're being stretched really thin. I don't know, we alwaysthink of creative ways, it's easy to think of creative ways, it's harder toexecute them. But I mean, think about it, what other businesses do you knowwhat other relationships you have that maybe you can leverage your buying poweras a dealership or your influence as a dealership to help your consumers getsome discounts on some other stuff. Man, I know

Kyle Mountsier 11:14

thisguy, just if anyone wants to be introduced, and I'm not going to plug the fullcompany, but essentially what they're doing is like making a dealership a likelike a gas station, and then giving rewards based on gas station credit cardspending. And so like, you actually give you what I mean look like a gasstation. Based on the classification you have you can classify your your creditprocessing, like you are a gas station, and oh, yeah, okay. Anytime someonelike processes a credit card or spends money with you, you actually get theability to give them back gas points. So this is the way that like Kroger, andyou know, a lot any place that does gas points that isn't an actual gasstation, this is how they reward their customers. Wells. Yeah, it actuallyreduces the amount of cost of your credit card processing, almost making itfree in the end, and then you actually turn it and give your customer thecustomer discounts at the pump. And you can incentivize it even so you canactually put like marketing dollars into it. So think about the, like strategicplay there right now, in a place where people are going, I stopped to spendmoney on my car, right? Because I need to get maintenance done. Plus, I need toget gas but the prices are rising. And this gas card has your logo on it. I'mjust man. It's a perfect timing for that this person is entering the market atthe right time. So if you're listening, no doubt, shoot me a DM and I'llconnect you for sure.

Paul Daly 12:47

Yeah.And if you don't know it's Kyle bounce here MOU n t s i e r hit him onLinkedIn. I'll hit you back. He'll hit you back. Alright, so we're going frommacro economics right fed interest rate increases what that's doing theeconomy. Now we're going to flip all the way to the other side of like this newworld of cryptocurrency and ft. Economics. There is a new project called theother side, right? It sounds like something out of Stranger Things, right? Butthis is the other side. It is a new Metaverse world so it's a virtual worldwhere you can actually buy real estate so other side deeds for this newMetaverse world land, it temporarily shut down the Ethereum blockchain. Somajor cryptocurrencies, Bitcoin Aetherium, the two biggest ones and theyoperate and function as like their processing unit on something called theblockchain. So Aetherium blockchain was shut down because demand for thesetransactions and processing the transactions of the sale of these deeds, likewill became so, so intense that no other traffic could get through. I know thisis educational mode, right? So

Kyle Mountsier 13:51

thisit's like think about if for some reason, all of the country was to go intoKroger right now and start like flooding, all of the all of Kroger systems withprocessing, there's a good chance that they would, you know, shut down somelevel of credit card processing.

Paul Daly 14:07

It'sjust trapped. It's not even, it's not even like shutting it down. It's likemaking it imagine, you know, you know what it's like when you go in Burger Kingon it, and like a rest stop and like the senior citizens bus pulls up in frontof you, right? And you know, and 70 people fall into the line, you're like, youknow what, I'm just gonna grab some peanuts in the gas station. I'm a hit thenext one. Right? That's, that's what it's like for kids open. They're makingfood, but it's just not worth you waiting. And then you add on and the way theEthereum blockchain works, why you the reason you would wait, is because theprocessing fee goes up. The higher the demand is because there's limited peopleprocessing transactions, and then it's supply and demand again, right? So on anormal day, right, you're going to pay a very low price. They call it a gasfee, you pay a low price to get your transaction process. But when thenetwork's blocked up, guess what? People start charging more and more. It'slike an auction system more and more to process your transaction. So Basicallythese parcels were being sold, there's 55,000 parcels of land being sold. Andthey average about $5,800 to buy the parcel, and the gas fees to process weremore than the purchase price. Some of the gas fees were six grand. So nuts. Andso you know, basically they they expended more energy on that blockchain inthat one day. Then basically the the, the eBay of NF T's expended in the lastnine months. So, and you might be like, what is what is this board ape thing?So basically, it's an NFT community, where you buy these little figures andthese figures can now live in this Metaverse world, they can actually belicensed out. It's you know, it's collectible meets functionality. I know tosome of you listening right now, you might be like, I This is weird. Actually,Kyle said that to me this morning. He's like, this world is

Kyle Mountsier 15:56

weird.Well, and I think like, there's, there's so much to be to be said here. I dowant to clarify, because I had a, I had a struggle with this of like, so wait,why does it take energy to do these transactions, right. And it's because ofthe computing and processing power that's necessary to code these transactions.And when you talk about a large volume of transactions, you know, that thesecoders and the people that code blockchains transactions are the best of thebest in the world. And so they're utilizing this processing power, like, thinkabout it as a decentralized computer from you know, 19, whatever, whencomputers came out, and they were as big as a room, right, that it took a tonof processing power to complete, you know, one plus calculations. Right,exactly. So it's the same mentality, but it's just more decentralized. Andthey're using the same volume of energy. And I think, you know, obviously, likeif two starts to solve some of that energy usage, and there are otherblockchain technology solving. We talked about the one that did the you know,the, the New York Times Square, I think, shut down that saying, hey, look, wewe process transactions so much more efficiently. So there's, there's going tobe a move here that allows more people to do this more efficiently. But it iskind of scary to think like, one day of traffic can literally shut downeveryone. That's

Paul Daly 17:25

a whole new,that's a whole new issue. Right? I mean, when he's talking about reliability,and actually moving a lot of transactions to that it'll be solved just like anynew technology, though, right? You have the speed bumps, and I know this mightwe might be floating around in the in the metaverse for you right now. Becauseyou're talking about this. We're about to bring it back down to the ground.Bear with us just for another minute. As of this morning, those NF T's thosedeeds, those plots those parcels of land. Or did we play the video for thatalready, Isaac, if you're watching now, if you're watching, we could throw thatvideo up so you can actually see what they look like they just look like you'replaying Mario Brothers went down a went down the drain tube, and that's what itlooked like. So either way this morning, they were selling for about $11,000.You know, Mike Hamilton just texted and I sell real estate for a living blowsmy mind, Mike, if you ever want to talk about it again, I help you out. Help you.I don't know a lot about real estate. No, actually, I'll do the transaction orthe translation. Yeah, so if you're watching on the livestream, right nowyou're seeing some of these parcels of land that were sold, and they justthat's just level

Kyle Mountsier 18:32

10.

Paul Daly 18:36

So theywere selling for about more than double of what they went for it the originalmeant, but chances are they'll go up even more than that. Here's the takeaway,let's bring it down to earth. Right. cryptocurrency is being adopted in moredealerships across the country, right. So having a basic knowledge of thisstuff is going to be beneficial for you in the long term. Not only that, butI'm willing to bet that every 2020 to 30 year old that is buying a car in yourstore has probably made money via cryptocurrency and nfts over the last yearand a half and so this is actually becoming a a plausible and regular revenuestream to so if you know a little bit about it's not going to hurt you butspeaking of dealers accepting cryptocurrency, it is alright, more dealers thanever are accepting cryptocurrency automotive news article featured our goodfriend, good friend Kevin Fry, the Jeff Wyler automotive group saying that theyare now accepting lots of different types of Chris cryptocurrency, Isaac youcan roll that video clip there's no audio to it. So if you're watching, but ifyou're just listening, this is basically them announcing they they acceptmultiple forms of cryptocurrency. Here's a quote from the article last monthMercedes Benz of Fort Mitchell in Kentucky sold a certified pre owned Benz to abuyer in Saudi Arabia. via that submitted internet lead and paid usingAetherium cryptocurrency back to Aetherium, said Kevin Frey of Jeff Wyler,automotive family who heads up marketing for the group. He said for us, it'sreally no different than getting a traditional down payment. It's just the formwe're getting it in is different. They will accept 12 cryptocurrency forms atit's 23 dealerships in three states. That's like a real that's a real happeningright now.

Kyle Mountsier 20:25

Yeah,and I love that. It's just, it's just matter of fact. It's like, oh, yeah, oneday, we needed to accept Amex. And so we got a payment processor for that.Yeah, sounds like today we we got to accept cryptocurrency. So let's get aprocessor for that. And it's really like the the blocking and tackling of itwithout having to try and make money on it or do anything like that. It reallyis just a way to transfer funds from one place to another place and sit adealership, actually, it's super approachable. There are a few partners, we'vetalked about, you know, a friend of ours at Scion, and there's some otherpartners that are making it possible. But really, like, if you don't want tothink about making money or investing or doing any of that stuff, and yousimply want to accept the transactions and then convert them to US dollars, youcan and there are technologies in order in order to like to give you thecapacity to do that. And it's a great opportunity for marketing, it's a greatopportunity to touch a buyer base that maybe wouldn't buy from you otherwise.Right. And so I think that, you know, just thinking of it as just, Oh, I'm justaccepting another type of currency. And there are technology providers thatallow me to do that, that allow the processing and transaction to take place.And I think that that's kind of what I hear in in Kevin and probably, JeffWyler's just verbiage right there. Oh, it's

Paul Daly 21:47

perfect.I mean, Kevin, Kevin is so like technologically forward facing, but he is sointent on the consumer experience. He says this, every important businessdecision that we make, we ask ourselves this question, does it make does thismake us more consumer facing? And when we apply does accepting crypto make usmore consumer facing? It's Yes, all day long. It's one more avenue that theycan transact with it's simple, safe, secure, and quick, except for yesterday,except for when board a yacht club is launching a new Metaverse D then we'regonna switch to Bitcoin. But I like that Kevin said it all right. If yourintent and that's how they want to pay, then that's how they get to pay. Right?Yeah, it's just another thing to do. So we hope you bear with us for all thatfinance information. I know it's a lot but it's important because the consumeris not going to stop moving forward. Yours technology. Neither are we see youtomorrow.

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