The author writes that it is important for businesses to keep up with changes in technology as AI advances. The blockbuster was worth more than $3 billion at its peak. Blockbuster had an opportunity to buy Netflix for $50 million. Netflix is now worth $265 billion while Blockbuster filed for bankruptcy in 2010. (AP Photo/Ron Heflin, File)
For those who ignore AI's potential to destroy the world, there is a world of opportunity.
As someone who writes on marketing innovation (using advances in science, technology, and engineering to gain competitive advantage and/or create shareholder value), I've written about the use of AI in marketing. But I am amazed by what I have seen. I had the opportunity to speak with Jim Cascade, CEO of Conversica, which is described as a leading provider of conversational AI solutions.
What we do know is that we are very bad at seeing the future when it comes to advances in computer science. We haven't looked at the video game PONG and we haven't looked at the $347 billion global video game market. Nor did we see PROFS, an IBM e-mail system and e-mail marketing, or client-server technology, and re-engineering or GUI interfaces as the destruction of the publishing industry. When we saw the first websites, fondly called brochureware, we didn't see e-commerce. When we saw the first e-commerce sales of CDs and bottles of hot sauce, we didn't see Amazon. When I watched the webcast of the 1999 Victoria's Secret Fashion Show, I didn't see it as the start of the live streaming industry. What I noticed was poor transmission quality compared to TV or cable.
The challenge is that the reasons why something doesn't work are more real than the chances that something will work in the future. People said that doing A, B or C online was not practical because you had to boot up your computer first, then do A, B or C. We haven't looked at “on-demand” or always-on computing and smart devices. As cell phones that are always with you, make them the preferred ways to do A, B, or C. People said that no one would buy diamonds online without trying them on, or without seeing their true color or feeling the fabric. Those were real barriers, we didn't see those barriers going away.
Technology has democratized the media business, anyone can publish a newsletter, blog, podcast or webcast. A single entrepreneur has access to tools and training videos on how to do SEO or how to create a landing page. But there is an AI software that will use subject matter expertise and do it for me. I don't need to be an expert or hire an expert.
Because of AI, everything we have learned since the introduction of computers, like big data and cloud computing, will become many orders of magnitude more powerful.
When it comes to the democratization of technology, it accelerates. According to Kaskade, it took the following time for various technologies to reach 25% of the US population. Thirteen years for cell phones, seven years for the World Wide Web, and one year for ChatGPT. Remember, ChatGPT is just an application, not a technology. Large Language Models (LLM) is a technology. Amazon, Google, Apple, and Microsoft can spread this technology so that everyone can access it. People with great ideas will be able to log into said accounts and deploy AI within an hour. This reduces barriers to accessing assets that are in short supply such as coders.
For traders, now is the time. Just as millions of dot-com millionaires and billionaires were created, so too will AI millionaires be born.
AI will not be the end of civilization as feared, but with the democratization of technology, the bad guys have access to the same technology as the good guys. AI can be used to infiltrate cyber security, money laundering or various other crimes. Who wins and who loses depends on who is determined to stay one step ahead.
We just can't imagine how much AI will change the way we do business. But if we don't want to see our businesses destroyed, such as retail brokerage, travel agents, music and video retail and rental, publishing, fax machines, and the photography industry. It's hard to remember that the blockbuster was worth more than $3 billion at its peak. Blockbuster had an opportunity to buy Netflix for $50 million. Netflix is now worth $265 billion. Based on the date, businesses should do the following.
Invest more in AI – Whatever your investment budget is for marketing innovation, at least double it. Look for opportunities to generate new sources of income. In the early days, AOL offered Barnes & Noble the opportunity to set up an online store in its online mall for free. Barnes & Noble declined because, at the time, they did not see the ROI to make the investment worthwhile. They should have seen the investment as a learning or innovation expenditure. Or think of expenses as buying options. You may discover something and the option will be worth a lot of money.
Scenario Planning – Since we cannot imagine the future, we must use scenario planning tools to create a wide range of AI-based futures and think through our strategy. The goal is not to predict the future, it is to help plan for it. How can this new technology destroy our business? What are our weaknesses? Don't rule out any possibility.
Monitoring – Keep an eye on new AI use cases and new business models and think about what might apply to your business. Pay special attention to companies that disrupt vehicles.
Yes, there are known problems with AI, such as hallucinations, cultural bias, and the end of the world as we know it. But we will figure them out. There are fears that AI will lead to job cuts. Job losses are to be expected. (There are no capuchin jobs today.) Or that students will use AI to cheat. At one point using a calculator on a standardized test would have been cheating. Maybe we were testing the wrong thing. Or what we test needs to change with technology.
What we know from history is that we have significantly reduced the impact of each computer advance. Now is the time to use AI to disrupt your current business model and reimagine it before someone else does. It spells both danger and opportunity.
Technology adoption follows some general principles. First, there will be applications that focus on cost reduction and productivity enhancement. These steps are the easiest to build a business case and get approval. Second, someone will find a way to make money using AI in a specific industry. Finally, someone will create a new business model, one that has the power to disrupt current or existing business models and create a whole new crop of millionaires.
Ed Gaskin is the executive director of Greater Grove Hall Main Streets and founder of Sunday's events.