Kyle Clements (00:00):
Hey folks for episode 58 of The Rental Roundtable we had on Garrett Schemmel. He is the equipment data guy with over 10 years of experience with equipment data. He was at EquipmentWatch, he’s built his own software products around how do you take the rental world we all love and package it up to analytics and data. Currently it’s CEO of Aislelabs outside the space, but as you all know, rental gets in your blood. So we talked about a lot of what’s happening in the equipment data segment, so started in 2011, but we’re looking at physical books that were set in the mail every quarter to 2017 ERP, starting to integrate with some of the data providers to now the cloud-based model and let’s talk about the future. The buzzword now is AI and how that’s going to impact analytics and data and how rental companies today can be using AI to understand their business, understand their rental side of things, understand their analytics better.
Kyle Clements (00:48):
If you like data, if you like to geek out on this stuff and you like equipment, you guys will enjoy this episode. Alright everyone, welcome to the Rental Roundtable episode number 58. Got my friend Garrett Shalon. Garrett, welcome to the show. Thanks, it’s great to be here. Thanks Kyle. Yes, the equipment data guy. That’s the phrase for today. That’s how we’re going to position you obviously both here in Atlanta. I was looking on LinkedIn, we have 123 mutual connections. I don’t know many people that would put you probably top 10 people I know at least knowing the same people. So the technology people and the equipment people, that’s sort of your thing and sort of my thing too. So we have a lot of people we could talk about. A lot of people know you and also know me, so a lot of mutual connections here.
Garrett Schemmel (01:28):
That’s awesome. Let’s crank that number up. Let’s get to know more people.
Kyle Clements (01:32):
That’s right. So for today’s episode I want to talk about how rental companies can use data to better organize the broader, their broader or maybe more specific equipment universe. So before we get into that, I always like to hear people’s origin stories that every episode starts this way. Obviously here we are and summer of 2025 both here in Atlanta. Talking about equipment data, tell me about your background. You obviously went to Georgia Tech and how you navigated through equipment and the data side. Tell me a little bit about your career history.
Garrett Schemmel (02:04):
Yeah, for sure. Went to school to make stuff was in the packaging world of all things. Put the two by six fridge pack on the shelf that you guys probably all use every day. Decided to go to grad school to beat the designer out of me. Went to MBA school and came out of that and a startup called Ranger Up, which is still out there today. We grew it to multimillions, sold to private equity and then right after that had to get serious having a kid and got a job in a large company called Penton, about 2000 people and that’s where I really got exposure to the data world and the equipment world and that’s let’s say 2011. And so at that point I took over a business called EquipmentWatch. EquipmentWatch was at the time based out of San Francisco and took it over and Boss said the next day, by the way, please move it to Atlanta from San Francisco and while completely rehired the business, but it was an awesome experience.
Garrett Schemmel (03:15):
For those that don’t know EquipmentWatch, it grew to be a business that serves 3000 customers, was there, grew the business for 2011 right before the pandemic hit. I’ll talk about that. But an amazing experience, about 3000 customers, the largest kind of data portfolio in the equipment space. Really a pure play intelligence business. The only one still to this day that only does intelligence. There is data in the equipment universe now, but it’s usually now connected and part of companies that also want you to sell their equipment to them. So there might be some bias there. But yeah, so took over equipment, watch multiple data products, what equipment costs to own and operate per hour used by thousands of contractors, helps them get paid back. Could talk all day about equipment cost thing. It’s probably the most misunderstood concept. It’s a financial accounting concept. It’s not a market benchmark concept.
Garrett Schemmel (04:13):
So there’s 24 things that go into it. The age of the equipment matters, what you paid for, it matters. So many things go into it. So knowing your equipment cost per hour is almost one of the most misunderstood things in the equipment universe to be honest. And since construction and equipment utilization, it’s a cost plus model by definition. If you don’t know what your costs are, you may be losing money and that’s actually one of the most important things in understanding equipment costs is making sure you’re actually profitable. So also known as the run rate blue book, that product, we had a valu, that product was about 40 years old, another valuation product. It was the first in market, it was like the Kelley Blue Book of construction equipment from the 1960s. What stuff was worth, obviously everyone has an opinion that’s much less of a objective product. So I love talking equipment valuations. So we built the most downloaded equipment intelligence report called EquipmentWatch Market Report may still be around these days tracked 12 main assets at the point of transaction in multiple asset markets. What equipment rents for, we’re the only source of advertised rates. So we aggregated public data from forwarded rental companies so people could understand what’s the maximum essentially I should rent for.
Garrett Schemmel (05:32):
So rental companies listening to this, obviously quite a few invest in theros analytics service, which is the lowest or the most that you should charge, right? It’s kind of the bottom end of the market. Don’t charge less than this or you’ll be less of your competition. So if you have access to the benchmark from quick watch, that’s the top end of the rental range and then obviously Ross would be the bottom end and in there is your rental zone, which is a great way to think about it. So really cool product. Use it also to help governments understand quite a few governments around the United States. Connecticut for one has an audit privilege and any reimbursement request that you do on equipment rentals, you’ve got to make sure they actually have to do a benchmark in market nearby and then specs are incredibly hard product and then serial number decoding for the used market for trade-ins and that kind of thing. But awesome product portfolio, just a lot of fun. Launched the first and only equipment intelligence user conference or conference called Traction in 2017 and 18 had a hundred cutting edge companies come to Atlanta.
Garrett Schemmel (06:48):
Yeah, yeah, Josh Nichols still lives Josh if you’re listening I would love to do another one. He says it was the best thing ever.
Kyle Clements (06:54):
Well I was talking to Josh this morning by the way, so Easter egg, Josh if you listen to this, call me, I’ll buy you lunch.
Garrett Schemmel (07:03):
It’s not a podcast if you don’t drop a name. Josh Nickel, right?
Kyle Clements (07:06):
That’s right. You got Elliot Vigil, Josh Nickel, you got to hit the power hitters here. So now you’re out of the industry, right? You’re CEO of Aislelabs. Tell me about that briefly. Obviously get back to the equipment side of here, tell me what you’re doing now.
Garrett Schemmel (07:19):
So to be fair, 2020, 2022, swung the bat at ownership to all you independent rental companies out there deeply respect you launched a startup called Iron Up which to help contractors manage their rented fleet. So they have all these great fleet management platforms for managing own rental companies. You guys are doing a great job increasing the size of the rental slice in the utilization pie. So more asset hours are rented than owned these days. Bad timing was like many of you was at Conex about 2020 right when we were launching our business and so we had some bad timing but got recruited in 2022 to run a software business called Aislelabs. I moved way I think about it. I moved from active construction phase to post-construction phase and so now I help the building operators turn building data into insights and yeah, it’s a lot of fun.
Kyle Clements (08:17):
Well a lot of people say rental gets in your blood and you’ve been out of rental a few years but you’re back on the river round table so you may be back formally at some point in the industry. We’re going to talk very specifically around the future of data and equipment rental here in a little bit, but I’m interested in your broad views. You have sort of become, not in your current role, but I’ve known you back in 2020 when I think of equipment data, you were the guy that came to mind and you were doing that for over a decade. I’m curious your view of the world in 2011 when you’re first getting into it and seeing how that’s changed over a 10 year period. There’s a narrative that rental companies aren’t using data enough, they’re not using technology enough. Maybe that’s true or not true. I guess where was the market in 2011? Where is it now in terms of adoption of analytics data? Where are we? Because you’ve spent all of the place in other industries, you could compare rental to other industries. Where does rental really stack up in adoption of data analytics?
Garrett Schemmel (09:20):
For sure. So we had a very basic rental benchmark product. It was a book in 2011 you produced quarterly so you could tell how valuable those intelligence.
Kyle Clements (09:33):
Was it like a yellow phone book that was this thick and you could hit someone with it.
Garrett Schemmel (09:38):
It was called the AED Green Books. Oh man, you can still Google it but obviously at some point EquipmentWatch bought and acquired it from a ED, the association equip distributors but it’s called the Green Book. So that’s kind of the reference point in 2011 and Ralphs hadn’t launched yet. That was 20 12, 13, something like that.
Kyle Clements (09:58):
So it was an analog book that you got. It was a book quarterly in the mail open up, lemme see what the rates were for this particular category class.
Garrett Schemmel (10:09):
That was it.
Kyle Clements (10:09):
2011.
Garrett Schemmel (10:10):
- Yeah man, I’m feeling old these days. But it was very much a compliance product. So the idea of rental of CI, competitive intelligence to throw some vocabulary out, it just didn’t exist. Market intelligence also a phrase that’s popular now didn’t exist in the rental space but non-existent was where we were in 2011.
Garrett Schemmel (10:32):
I think there was through 2012 to 2017 there was really the rise of content marketing that was data driven. So I think that the best way to get an ecosystem, the market to care more about data is to make sure that some basic version of it is accessible. And so that was the rise of the KU watch market report. Ralph also had a great report that was very rental centric. We catered to a broader part of the market at the time, but I think when you look at the classic rental ERP systems, those are the traditional players on-prem APIs didn’t exist. We built the first consumable API like market intelligence API around 2017 for quick launch so that anyone that wanted to build rental software could do it. We integrated into in the 2017 to 18 timeframe we integrated with almost all the major rental platforms so they could automate a lot of workflows. So specs, serial number, decoding, there’s just a lot of features. Taxonomies, one of the worst things you can do in software is let people type stuff in. So I mean structured data is the enemy of insights and so this really interesting book to the rise of software, the rise of cloud software and then really I think in the past five years, five, six years, there’s been a big rise of structured data and appreciation for good data in the systems because if you power BI came around, you want Power BI to be pretty, you can’t call something a truck, a white truck, an F-150 and pivot that because you’re not going to have good insights, right?
Kyle Clements (12:13):
Yeah, it’s interesting. Simplify 2011, you’re getting a phone book in the mail 2017 starting to plug in some of the ERPs, the rental systems to send data back and forth. 2020/22, you started getting more structured data where then you could say, okay, let’s start to compare trends over time, maybe even with competitors across markets. Unstructured data is the enemy of analytics. Where are we now? Where is it moving? What’s the future? It is actually crazy that 14 years ago it was books and it’s actually in some sense amazing that we’ve actually moved that quickly in this period of time. Where are we now? Where does the next five years look like? What’s the future of data in the equipment world?
Garrett Schemmel (12:58):
I think it’s going to be driven by the cloud applications, the ERP systems that you guys are all using going more and more cloud. I mean I couldn’t help advocate for cloud-based alternatives so that you can, which is really moving to a model, A maintenance model is a buyer of software of saying I don’t want one update a year. I would like updates weekly, monthly, give me the good stuff. So really it’s about, I think there’s got to be a rise of a desire for constant improvement and acceptance of constant improvement and not worrying about it changing your workflow. I would still love to see a lot more market intelligence in the space. I would love data structuring to come around. So one thing I’m really excited about was the A launching their taxonomical standards last year.
Garrett Schemmel (13:54):
That was done in some form in 2012 specifically not equipment taxonomies but for metrics standards calculations in 20 12, 20 13. That’s what allowed for really Ralph’s benchmarking to arrive was everyone agreeing to how to calculate something. And so I think the tax anomal standards are really great. They’re going to let benchmarking within a fleet happen first. So if you’re not consistent with what you’re tagging, everything that comes in, it’s very easy to type different things. So using taxonomical standards equipment, which has a taxonomical standard, the association equipment manufacturers has a standard, although it’s much simpler and pretty much used for their own internal benchmarking at the OEM level. So there’s 2, 3, 4 taxonomies in the total equipment ecosystem obviously specifically in rental to a RA is pioneered one, which of course has some asset classes that are more applicable to rental as opposed to heavy civil dirt or earth moving equipment, that kind of stuff, which is typically less rental, at least some people think of that.
Kyle Clements (14:57):
Yeah, I mean kind of go 2025, the cloud model, we sometimes hear people say, no, I want to serve, I want to look at it. But that’s not really what we hear very often and I would just, what I’m amazed at is even as the five years I’ve been in this industry, how quickly expectations have changed. I’m okay with whatever. It’s always been done this way to like no, I want the latest and greatest. It needs to be cloud-based, mobile friendly, fast and that is amazing how quickly people’s expectations have been shifting and it puts a lot of pressure on the rental softwares to deliver and ultimately that’s where we live, but we have something to do every day. But you’re talking about even the future, these taxonomies, the A set program launched about a year and a half ago, Josh Nichol headed that up now John Gwinnett’s working on that as a way to standardize across all the a r members, the thousands of a R members.
Kyle Clements (15:54):
How do we know as an individual rental business, how am I performing relative to my peers? And obviously Rouse offers that there’s a price point to that. A lot of the larger groups use Rouse, but it’s interesting when we talk about a taxonomy standard, well you have the Rouse standard and you have now the A standard and you have all these, we still haven’t arrived as an industry, like a gold standard of like this is actually what we call a category class and these are the pieces of equipment within that and there’s some debate. I don’t think as an industry we’ve gotten there yet. I don’t think we as an industry, we’ve said no, this is our metric system, this is how we measure units and this is exactly how we do it. I think if people are moving in that direction, but I don’t think we’ve gotten there. My hope is over the next five years do we start to coalesce around gospel a source of truth. We say no, this is actually how you call your piece of equipment. This is how we can standardize it. Do you see that world coming where we all sort of agree that this is the one way to do things?
Garrett Schemmel (16:49):
Standards are difficult. So I think there’s a lot of reasons why someone could push back on a standard, could be five 60% of the market. My platform, if I agree to, I have my own standard. If I agree to an outsource standard, I may feel like I lose some control. So just as someone that’s been on some time on the software subscription, business model, operator side, understand that sometimes you have to think through your own selfish business lens. So I think that’s a headwind to standard normalization, but I think, I mean I just unquestionably when they happen, for example, there’s an equipment ecosystem. The associated equipment management professionals in 2014 put out their telematics standards. So I was in the room when fleet managers at guys like Walsh and Skanska, they came out and said, Hey, I’m not going to log into a Deere platform or a CAT platform.
Garrett Schemmel (17:48):
I need all together. And that standard was powerful and OEMs got behind it. It was a small association in the scheme of things, right? Smaller in terms of headcount A and p doesn’t have the rental show, it doesn’t have this massive gathering, but it was really powerful and getting the industry to move. So my advice is to your audience, to the independent rental operators, if you want information and intelligence, go to the a r, share that expectation with the A RA because the organization best capable of getting the standards out that you want is unquestionably the A RA. They’re the ones that can do it. So more and more there’s so many different standards that could be put out. I would like to see just continued path towards that. A key part of obviously getting standards adopted is they have to be in the right place and they have to be inside your customer’s workflow.
Garrett Schemmel (18:48):
And so making them accessible to qui of the world, the economics of integrations are kind of weird. So if it cost the area a dollar to make something, they’re going to want to recoup that theoretically who pays for it? And so to make standards happens, you have to keep the cost as low as possible, which again benefits the A RA and just pushing them through and figuring out that economic model. That sounds like a silly thing, but passing through costs is a really big thing, especially at the industry level. You want something where it’s not a burden on the platform. Guys like you guys
Kyle Clements (19:26):
On the taxonomy side, even starting this from scratch five years ago the first question we asked was can we integrate with something off the shelf in the automotive industry there’s the standards, there’s taxonomies, Chrome data is one that you just plug it, right? And that worked and we started the previous company Clutch and we just plugged right in and the first question we asked and everyone was like, there’s no standard. So we started building our own and point rentals got their own and everyone’s got their own system that they’ve built and it’s almost, I don’t want to be negative here, but it is almost like a tragedy of the commons situation where it would cost all of the individual rental softwares money to move towards this new version and the benefit necessarily isn’t there. I think what needs to happen, I hope, and it’s starting, there’s momentum is a members start demanding this and a RA says, Hey, here’s the new standard.
Kyle Clements (20:17):
If you, I’m just hypothetically, but if you want to come to the ARA show next year, you need to be plugged into our taxonomy and start to sort of push this forward. The reality is that would be good for the rental softwares, it’d be good for the rental companies. Can you imagine the analytics you can start to provide if you can then of the 10,000 rental companies really be able to say you log into your rental software, how are you actually performing and the data’s accurate and everything just flows better. It’s just better for everyone. The challenge is how do you get that to, and it does sound like you sort of need an organization really to push this forward and it seems like things are moving that direction. I hope it would go faster. 2011 we had paper, phone, books, progress.
Garrett Schemmel (21:00):
It really is the economics. It really is. So I know there’s the A set, I mean if A is here on this call, I would of course advise them to get it into an API form, but of course that starts to, who pays for that?
Garrett Schemmel (21:14):
Build APIs. Is that a thing? I don’t know if any association has really built an API, so I don’t know I I think we need some great benefactor, someone to swoop down from the rental gods and subsidize all this, right? Pay for that middle technology piece is the hard part. It’s that technology piece so that guys like you can do this or because for the audience it’s like a flat file. It’s like imagine looking Excel file with columns in it and that is the product put out on
Kyle Clements (21:44):
Day. It’s not hard when you say it’s the economic, it’s the buy-in. If we said, Hey, here’s our qui taxonomy, this is how the whole world needs to work. Well some rental companies say, I don’t want to do it that way. Then that’s sort of the challenge is there’s these different things. I think Rouse has probably done the best job lately of about it. If you want to use the Rouse service, you have to use the way that they’ve set it up and the Rouse service is powerful enough that they’ve been able to get people to do it. So it really is around leverage. What is the, I think what people miss is what the value is. There’s a tremendous value to being on a standard taxonomy. All people see is the headache. So if there’s a way to pull forward some of that value and show what it can do, that could also maybe expedite some of this.
Garrett Schemmel (22:30):
What makes it all super nerdy here, but what makes it all even harder is the lack of a federal standard. So through another business next to quit watch that I ran called Price Digests, plural an S on the end it was where Quick watch focused on off highway, it was on highway over the road depending on who you’re talking to plus some other things like brine and boat. But for our best product, our biggest product was a truck ODing, API. And it was amazing because all these federal standards were there. We were able to build an API that was incredibly high performance. Give us a hundred bid vans, we would decode 99 of them effectively watch at a EquipmentWatch. We also had a serial number to coding a p the first in the market in 2017 and 18. We literally took a book like this, right range based rules and turned it into an API. But at the time we could never get it anywhere near 99%. And so again, if none of us want necessarily Uncle Sam inside of our business, but there are costs to lack of regulation at times. So federal government in your can really help with normalization for sure.
Kyle Clements (23:47):
So one of the things you mentioned earlier was just switching topics again was equipment costing and how that’s one of the most important things rental companies need be thinking about like cost per hour. When you hear about rental metrics, people will ask us, Hey, I want to see your reporting. What they really mean is they want to see fleet utilization, time utilization, dollar utilization, some ROI numbers. It’s pretty simple calculations and there’s an 80 20 rule where, well that actually probably gets you pretty far, but what are some of the other metrics rental companies should be looking at or be thinking about on a regular basis to help understand how their fleet and how their rental company is performing?
Garrett Schemmel (24:25):
That’s a great question. I’ve had the chance to sit in peer groups and talk about this with a lot of rental companies. I mean I think you mentioned the top two, right? Dollar utilization and asset utilization, fleet utilization, not necessarily metrics but important concepts. When I say metric, it may not be a financial KPI like the ones we just mentioned, but really understanding your equipment cost per hour. So it’s services like EquipmentWatch, have the academic model you can go in, it’s called the internal charge rate. It’s something that your customers, your most professional customers, especially in the heavy civil side where their business is equipment utilization, they really know this. So you’re going to, I mean personally if I’m having a conversation with a prospect, a really smart prospect, I’d ask ’em, what’s your equipment cost per hour? And if you can drive them, if you can give them a lower equipment cost per hour, they should all day long go with you. So there’s a lot of things that go into it. The cost per hour is the ownership cost, which are usually from fixed cost depreciation and then there’s operating costs. So a service like watch can give you some great standards, some great benchmarks. It requires you to have good books. Mike, what’s your cost of insurance? How are you allocating cost, your costs?
Garrett Schemmel (25:43):
Listen, I just think equipment costing is just so critical. It’s so critical and to the point where just to show how important this is, if you go to your customer side, again, go to the heavy civils of the world and the site and the site contractors, they won’t share with each other what their cost per hour is. That goes into the bid, right? It’s like number one on intellectual property is don’t share our benchmarks. So anyways, yeah, I could talk all day about equipment cost.
Kyle Clements (26:14):
What percentage of rental companies, if you did have to guess here, understand their equipment cost per hour? 10%?
Garrett Schemmel (26:20):
Yeah,
Kyle Clements (26:20):
I think it’s 10% and the reason I could say that is people aren’t asking or talking about it. I never really hear about it, right? Ask the obvious question out loud. I’m a rental company, never thought about equipment cost per hour. Sounds like another thing I need to look at. Why does it matter?
Garrett Schemmel (26:38):
It matters because it helps you understand your ideal point of disposition as well. In 2018, we built the first disposition product on the planet. We built concepts for it. We also built the first residual value software on the planet. What is my asset going to be worth in four years? But on the owner side or on your customer side, there’s this concept of a sweet spot of disposition. It’s where simply the ownership costs and the operating costs intersect after that point. Your operating costs surpass your ownership costs and academically that’s the ideal time to do it. We had some really interesting data that where because we were tracking millions of assets in the market per year by asset class, we could see disposition humps. So we could see for example, for scissor lifts, there’s a huge disposition point at age equals three and then there’s another one at age equals eight.
Garrett Schemmel (27:29):
So there’s just some disposition behavior, especially for the big, big guys, right? The top three, the top two that show how they want to just, they have because they have super constant utilization and they have contracts and leasing terms. That first year three disposition point is the end of a lease that goes back to remarketing right at the OEM, but knowing when should I get rid of something? When have I held something too long? Typically, because they don’t have to answer that question scientifically. They’ll say, oh, we’ve always been doing it, we always get rid of it X hours or we get rid of it X age. But knowing that is really key. It does take, it’s a different thing. It’s a different thing for rental companies and there’s a lot of things that admittedly go into that, right? If you’re in an environment where if you’re in Alaska and you just have to have uptime, you might get rid of things at 24 months. You might get rid of things at the end of initial warranty because you just can’t do it. Then there’s the whole rent to own versus rent to rent. If I’m a Komatsu dealer, I’m a rent to own model, I get rid of things not based off of any disposition decisions, cost decisions, I get rid of it. When the OEM warranty is gone, I have to sell it at 12 months basically,
Kyle Clements (28:41):
Right? We’ve talked to a lot of rail company probably at this point, thousands over the years, and so we see the top elite performers and everyone in between and it seems to me is the top groups they view red, and I don’t want to hear if you could agree or disagree, but they view their business. They are asset companies, they’re data companies and their whole game is figuring out how do we buy equipment at the right price? How do we sell at the right price and the right time? How do we price our equipment appropriately? They think all day about pricing and data and assets and financing and customer service. All this stuff matters, but at the end of the day, I think heavily on the financial side of things, a lot of the way the car dealerships think about, they’re very financial operator, but I don’t know if that’s necessarily the norm, right?
Kyle Clements (29:27):
You work with a lot of the top groups based on the products you were looking at, but a lot of people, I think it’s time to sell this. I think it’s time to buy it and there’s not a lot of rigor necessarily, and it’s not anyone’s fault. The tools don’t always exist. We can’t even agree on the right taxonomy right now. What advice would you give rental companies who are thinking of hearing this conversation and they go, okay, Garrett’s the equipment data guy. What do I do about this? Is this important? How do I even sort of move into this new world,
Garrett Schemmel (29:53):
Man? I mean, get your hands on Intel. Call people that can help you guys like me guys. Watch guys like other companies that can help you and just understand the fundamental concepts and start there. Understand first plot on a sheet of paper, when was all the assets that we’ve sold? When did we sell them? How many hours were on them? What time of year was it? Just look for your bias, right? Do you understand when your organization, obviously if you’re small, one location, two locations, this is an non-issue, but just ask around the optimal time to buy and begin to get the data. The cost data is important. Having a good market data source is important. Knowing where the bias is, right? If you’re going into Orlando in January and that’s when you’re buying or selling, it’s a good time to sell. It’s a bad time to buy traditionally. Typically there’s a 10 to 20% premium on assets in Orlando in January, just don’t sell it because you always sold it that way. I guess it’s always the right, don’t do what you’ve always done.
Kyle Clements (31:04):
Yes, the mindset gridlock is what we would call it, but it’s always been done this way. We shouldn’t change and I just can’t express enough how quickly this space is changing. The expectations are rapidly accelerating. Part of which coming in here is ai. I’m sure you’ve thought a lot about it in your current job as A CEO. I had a CEO software peer group this morning, and that’s the thing everybody’s thinking about. How does that, it’s coming, it’s here whether we like it or not, this is the reality, right? I mean, how does AI play into equipment data? How does that platform ultimately accelerate some of these things we’re talking about?
Garrett Schemmel (31:45):
That’s a great question. I mean, and the answer is you can do things today. So I just happen to be at a meeting of 30 software company CEOs two weeks ago, and we had some kind of a special forces team come in that had been trying to crack the code on what does AI mean to us and really what is it about? Is it revenue driving? Is it cost saving? What is it? I think today to give some simple nuggets of possibility, number one, it’s probably on day one, an efficiency driver and thus a cost driver. Look at guys like Microsoft are doing those that actually are creating the tools. They’re on the cutting edge. They are eating their own dog food. Microsoft laid off 6% of its workforce, 3000 mostly developers. They figured out that for software developers, they can get anywhere from 20 to 30% more productivity out of them through copilots, where if you haven’t seen it, it’s pretty amazing.
Garrett Schemmel (32:39):
It’s code base on the right. There’s AI that actually anticipates the next thing you’re going to write and it writes it for you and you hit tab, you say, sure, or if not, you just don’t accept it. It’s pretty incredible. So on the software side, it’s a big deal, but to the average rental company, do what I do, you’re tired. Something just came in. You’ve got to interpret what it’s all about. It’s the end of the month. It could be the financials. You don’t know what to do. Buy the $20 a month chat, GBT, cloud, whatever, Gemini service, they’re all the same price. Buy that version because with the paid versions generally comes IP ownership for you, the free versions, you’re the product. Upload that Excel file and just talk to it, call it your analyst and ask it questions and export your data out quickly. Ask it. What’s going on, Kyle, we’re all of those people in software, we’re now understanding that it’s probably an analyst as a service on day one, but to the rental operators out there, just embrace it and use it. Use these LLMs, these large language models, these chat-based services. There’s AI to nerds like you and me can mean something different and more specific, but use those tools that, I mean, in my organization, I have AI goals, AI requirements now to the point where before we hire that next person, let’s first find out can we do it with AI and ai? It fills the hardest information spots in the business. It fills that role that you always wanted, but you couldn’t really get
Kyle Clements (34:14):
A lot of the top owners we talk to, they spend 30 minutes every morning or at least once a week going through the utilization numbers, tracking all of that, running reports. AI can do that in 30 seconds and buy the $20 version. I use it all time and download your data, upload it, and yeah, start talking to asking questions. Hey, pretend you are my equipment rental analyst and everything about equipment rental right now. I’m going to ask you some questions. Where am I under utilized? Where should I change my prices? What should I be buying? All those questions, it’s already smarter than us, and that’s off the shelf today. I think it’s also on the onus of the rental software is to be incorporating this quickly, right? Because I think there’s also risk for the groups like us that if we just sort of sit on the sidelines and stay as a system of record, AI starts to eat into what you’re doing and people start to go, why do I need a system of record, a commodity? I’m using all my AI is the power, right? AI is the juice. It sounds like, I mean you’re sort of indicating this, but in terms of hype here, is this a fad? Is this here to stay? What’s your view? Particularly how it’s going to impact rental companies and rental software over the next few years?
Garrett Schemmel (35:28):
I, it’s a hundred percent here to stay. Again, if you think of it as an efficiency driver slash cost saver on day one, honestly the way I think about it is in the context of that 30 business CEO conversation, it was like, oh wow. We can lock massive efficiencies in how developers work or how teams do things.
Garrett Schemmel (35:51):
We’re facing a unique one, set a generation step function of efficiency. Just if you’re to graph efficiency over time, instead of a nice gentle slope, it’s going to just go pop up 20%, but then it’s going to flatline for a while again, or incrementally slope. You have to decide if you’re on that step curve or not or if you’re down below. So it feels like we’re all sprinting head and being awesome, but the reality is if nine out of the 10 of us get on that step curve, we’re just at another level of competition. I just can’t imagine being that company that doesn’t get on the curve with everyone else. I think that’s the biggest thing to take away is if you haven’t touched ai, if you haven’t touched the language models, you haven’t talked to them. If you haven’t tried to ask them to do A, B, and C and then find out they can do D and F, and then I had the final acceptance a month ago that I’ve been surpassed as a human, and it was a weird feeling.
Kyle Clements (36:45):
The same thing happened. I don’t know what happened in the last month. For me, my mindset’s totally shifted to interesting. Cool. Probably here to hear yesterday, there’s a meteor coming towards earth. It’s either going to take out the dinosaurs or it’ll create a nice pool for us to swim in. But it’s happening and I think pretending it’s not going to be here, there are some people who just aren’t there, but I think a lot of people are there. Even rental cups are asking, what are you doing around ai? That was not a question six months ago. Three months ago, people weren’t asking, I don’t know what’s changing. I think people started using it more often and seeing the power of it.
Garrett Schemmel (37:17):
You can use it to find prospects. Hey, find 100 contractors with this revenue range within three miles of me. Boom. If you can get a hundred prospects in three minutes and your competition takes a day to get a hundred prospects through some other paid tool, right, you’re already losing the sales battle.
Kyle Clements (37:37):
Right? On a separate note, Tidemark, their venture capital group, Dave, you on there, he writes a lot of essays on vertical software and ai and he wrote one yesterday, Gary, you particularly, but it’s talking about how does a software company like a point of rental alert quickly? How does that interact with AI in the future? And I don’t think anyone knows. If you talk 10 people get 10 different answers. So I personally don’t know either. But there’s this idea you transform from a system of record to a system of action. So not even have you read that article. You know what we’re talking
Garrett Schemmel (38:09):
About. Yeah. I’ve read about the evolution of everyone aspired to be a system of record forever, and now I’ve read that article. Yeah, I think it’s interesting.
Kyle Clements (38:18):
I don’t know, is it right? I don’t think anybody really knows. Things are changing so quickly. It’s hard to know. I think biggest thing is embrace reality. It’s moving. Try to learn to engage in this, but if it is smarter than us today, what are jobs that aren’t being done within rental companies that could be done? What are jobs that people don’t like to do or aren’t good at that can be done? How do you use AI to improve the customer experience? It’s not about replacing jobs, although philanthropic, CEO would say, we’re going to replace all white collar jobs within zero to three years of experience in the next two years. That is in 20% unemployment. That’s a view. I don’t know about that, but I think there are a lot of cases where it can make rental companies way more efficient, way more effective. And I think if the industry as a whole can embrace this, I think it could be a boom for rental companies because it’s a physical machine that has to go into the physical world to do physical tasks. And if you can make the operational cost center lower and more efficient, more effective, that’s ultimately going to be good for rental companies. But your point, if nine out of 10 adopt it, well, then the curve just becomes level and that’s now the new standard, right?
Garrett Schemmel (39:24):
Yeah. I mean everyone’s super excited about the let’s integrate LLM capabilities, but how hard is that? It’s $20 a month. I mean, we’re building some really cool things at Aislelabs, our marketing team and structuring data and basically I have a super data product be on everything, obviously.
Kyle Clements (39:41):
Yes.
Garrett Schemmel (39:41):
But I love to give, when I’m building a relationship with a future customer, I love to give, give, give. And so we’re able to, we’ve used ai, we use Google alerts for our own selfish benefit to watch for new prospects, for us new properties. So when they kind of announced, aggregate all of that using automation, and then we’re like, holy cow, let’s start to give this away after a certain point. Let’s launch a new property database so that people can, so there’s so many interesting ways to answer the question. If someone needs the simplest guidance, what have you done poorly? What has been hard for you to do? Well write that list of things down and then go after that with ai. I love that. Usually fixes that.
Kyle Clements (40:25):
That’s a probably great place to wrap up here. We’ll do another episode of the future in a few years to see how accurate our predictions were. I mean, I think we’re both bullish that it’s here, how it plays out, not sure, but I think summarize it, you don’t want to be that one out of the 10 groups that aren’t moving forward on this, right? Because however, this future shapes up, it’s happening and you’ll be left behind if you don’t move there. So it’s exciting time. Things are changing very quickly, very quickly in the rental space, particularly on the technology side, monthly almost at this point. So it’ll be interesting to see what happens. Final question, I have Garrett traditional question. Everyone sort of pauses because I don’t know, but best career advice you’ve ever gotten, and if you can’t think of your best career advice you’ve ever gotten, but some solid business advice you’ve gotten that’s helped shape your success and what you’re doing today.
Garrett Schemmel (41:14):
Alright, let’s answer the best career advice. I deeply believe in if a leader needs something hard done, if it scares a lot of people, just say yes. I think one of the things I’ve been most surprised by in my career is people say, wow, you’ve done so many amazing things. Like for example, I was able to run a business in my late twenties when I know a lot of people in my software ecosystem now start 10 to 15 years later, do whatever you can to get that massive experience as early as you can. And it’s amazing how it compounds.
Kyle Clements (41:51):
Saying yes to the hard thing, gain the experience, figure it out or fail, but you learn and you’ll be better for the next time, right?
Garrett Schemmel (41:58):
It’s okay not to go straight in your career path.
Kyle Clements (42:01):
Fair enough. Well, Garrett, thanks for coming on here. Josh, if you’re listening and you listen and call me, I’ll buy you lunch again. But Garrett, thanks coming on. I know you for five years, the fellow Atlanta person here. So thanks again, Garrett, for coming on.
Garrett Schemmel (42:14):
Thanks, Kyle. Been a pleasure.
