The authors write that as AI advances, it is imperative for businesses to adapt to changes in technology. At its peak, Blockbuster's value exceeded $3 billion. Blockbuster had the opportunity to acquire Netflix for $50 million. Blockbuster declared bankruptcy in 2010, but Netflix is now worth $265 billion. (AP Photo/Ron Heflin, File)
Even for those who aren't focused on AI's ability to destroy the world, there's a world of opportunity out there.
As someone who previously wrote about marketing innovation (the use of advances in science, technology, and engineering to gain a competitive advantage or create shareholder value), I have written about the use of AI in marketing. I was shocked by what I saw. I had the opportunity to speak with Jim Kaskade, CEO of Conversica, which is said to be a leading provider of conversational AI solutions.
What we do know is that we are very bad at looking into the future when it comes to advances in computer science. We didn't focus on the video game PONG or the $347 billion global video game market. Nor did he think that PROFS, IBM's email system and email marketing, client/server technology, re-engineering or his GUI interface would disrupt the publishing industry. When we saw our first website, affectionately called Brochureware, we didn't realize e-commerce. When CDs and bottles of hot sauce were first sold through e-commerce, Amazon was unknown. When I watched the 1999 Victoria's Secret Fashion Show webcast, I had no idea it was the beginning of the livestreaming industry. What I noticed is that the transmission quality is poor compared to TV and cable.
The problem is that the reasons why something won't work are far more real than the chances that something will work in the future. People have said that it's not practical to do A, B, or C online because you have to first turn on the computer and then do A, B, or C. I didn't see any “on-demand”, always on-demand computing or smart devices. Mobile phones are always with us and have become the preferred means of doing A, B, and C. People have said that no one buys diamonds or buys clothes online without trying them on, seeing the true colors, and touching the fabric. Those were real barriers, and we didn't see those barriers go away.
Technology has democratized the media business, allowing anyone to publish newsletters, blogs, podcasts, and webcasts. Solo entrepreneurs have access to tools and training videos on how to perform SEO and create landing pages. But there is AI software that uses its subject matter expertise to do this for me. I don't need to be an expert or hire an expert.
Thanks to AI, everything we have learned since the introduction of computers to recent developments such as big data and cloud computing will be orders of magnitude more powerful.
The democratization of technology is accelerating. According to Cascade, it took a while for various technologies to reach his 25% of the US population. In mobile he has 13 years, in World Wide Web he has 7 years, in ChatGPT he has 1 year. Please note that ChatGPT is just an application and not a technology. Large Language Models (LLM) is a technology. Amazon, Google, Apple, and Microsoft can popularize this technology to make it accessible to everyone. Anyone with a great idea could log into the account above and deploy her AI within an hour. This reduces barriers to accessing assets that are in short supply, such as programmers.
For entrepreneurs, the time is now. Just as millions of dot-com millionaires and billionaires have been created, there will be a similar number of AI billionaires.
While AI won't bring about the end of civilization as feared, the democratization of technology will allow the bad guys access to the same technology as the good guys. AI can be used for cyber security intrusions, money laundering, and many other crimes. Who wins or loses depends on who commits to staying one step ahead.
We have no idea how much AI will change the way we do business. But we have to do it if we don't want to see businesses like retail brokerage, travel agencies, music and video retail and rental, publishing, fax, and photography industries destroyed. It's hard to remember that Blockbuster was worth more than $3 billion at its peak. Blockbuster had the opportunity to acquire Netflix for $50 million. Netflix is currently worth $265 billion. Based on history, companies should:
Overinvest in AI – Whatever your investment budget for marketing innovation, at least double it. Look for opportunities to create new revenue streams. In the early days, AOL offered his Barnes & Noble the opportunity to open an online store for free in its online mall. Barnes & Noble declined because they didn't see a good return on investment at the time. They should have looked at investment as a cost of learning or innovation. Alternatively, think of the cost as an optional purchase. You might discover something and the option could be worth a lot of money.
Scenario Planning – You can’t imagine the future, so you need to use scenario planning tools to create a broader AI-based future and think through your strategies. The goal is not to predict the future, but to plan for the future. How will this new technology disrupt our business? What are our vulnerabilities? Don't rule out all possibilities.
Monitor – Track new AI use cases and new business models and consider what can be applied to your business. Be especially wary of companies that drive disruption.
Yes, AI has well-known problems such as hallucinations, cultural bias, and the end of the world as we know it. But we understand them. There are concerns about job losses due to AI. Unemployment should be expected. (No keypunch jobs today.) Or that students will use AI to cheat. At some point it will be cheating to use a calculator on a common test. Perhaps we were testing the wrong thing. Alternatively, what you test may need to change to accommodate the technology.
What we know from history is that we have vastly underestimated the impact of all computer advances. Now is the time to use AI to disrupt your current business model and rethink it before someone else does. It is both a threat and an opportunity.
Technology implementation follows some general rules. First, there will be applications focused on reducing costs and increasing productivity. These initiatives are easiest to build a business case and gain approval for. Second, someone will find a way to make money using AI in a certain industry. Finally, someone creates a new business model that has the power to disrupt existing or existing business models and create entirely new millionaires.
Ed Gaskin is executive director of Greater Grove Hall Main Streets and founder of Sunday Celebrations.