AI will redefine your industry

February 28, 2023 – Originally published on Linkedin here

Dear CEO,

If you see AI purely as a means to reduce cost to serve you are missing the point. Greater efficiencies in the majority of industries are a first order effect of AI.

The second order effects will rewrite the customer relationship in almost every industry. Your market is about to undergo a structural shift.

Why should you listen to me on this point?

Because I’ve been seven to ten years ahead on this topic for a long time. In 2016, I led a project with Microsoft to create an AI Co-pilot for a world famous CPG company. This project influenced Microsoft’s strategy. I bet you can guess how :).

Taking the long view helps. People buy products and services as part of the systems they use to meet their needs. Their fundamental needs don’t change but these “satisfiers” do.

As new technologies emerge and mature they change the options open to us. Some technologies bring incremental change while others bring seismic disruption.

Before the invention of the steam train most people would live and die within thirty miles of their birthplace. As the locomotive chugged through the countryside it swept away of a way of life and left a new one in its wake. Coaching inns and horses declined and railway hotels boomed.

The automobile gave birth to road trips, out of town shopping and traffic jams. Local shops suffered and travel exploded.

Like all truly disruptive technologies Artificial Intelligence makes what was impossible possible. The expensive becomes affordable, the change includes some and excludes others.

Some industries have undergone radical change as a result of the internet.

The second order effects of AI will be even more consequential. Is your business soon to be redundant like the coaching inn? What do you need to become?

As you read this, the market landscape is being redrawn. The race to see who can be relevant has begun.

• What are you doing about it?

• Have you examined second order effects on your market?

• Have you allocated money to examine this and follow up on the required action?

• What investment are you making?