Paranoids and Boiling Frogs in the Era of Generative AI.

I recently revisited Andrew S. Grove's book "Only the Paranoid Survive". He was chairman and CEO of Intel Corporation. This book was published in 1996 and quickly gained recognition as one of the most important sources of information on business strategies in the changing world of technology. The main theme of the book is the concept of "inflection points" in business - moments when the fundamental principles of the industry are changing. Grove argues that companies must be "paranoid" to survive in the face of such inflection points. In other words, companies must be constantly vigilant, always anticipate possible changes in their environment, and be ready to adapt quickly to them. In the fourth industrial revolution, new technological trends usually appear after some major crisis. One could trace back several decades and see how after the "blue chip" crisis at the beginning of the 21st century e-commerce developed rapidly, and how after the 2008 crisis social networks gained importance. They completely changed the market. But did companies immediately behave like Intel - positive paranoid? 

The answer is simple - NO. The market needed about 5 years to realize what was happening and adapt to the new realities. Internal sales departments gradually moved to new business models related to e-commerce, after recognizing the potential of social network marketing, the new term Digital Marketing became the basis for even very traditional businesses. What's happening now? Since 2015, trends related to Big Data, IoT, AI, Cloud, and Mobility have been appearing in the market of new technologies. The "paranoids" were massively testing new technologies and adopting new business models. COVID-19 accelerated the adoption of cloud and mobile solutions. You could show exponential sales growth through e-commerce channels (particularly thanks to mobile payments and quick delivery of goods). Unknown customer offers appeared, gaining market share, such as choosing 5 products, leaving what fits, and returning the rest at our expense. Drop shipping dominated "small" trade, and in many cases, social media portals became the only access channel to the customer even for large players. What's ahead of us? I think most companies and their leaders realize how pivotal a moment is coming or has already come. I'm talking about Generative AI, of course. And to be clear, these are "paranoids" in the positive sense of the metaphor. They try to identify work and processes performed by dozens of employees and intelligently automate them. And while in the era of software Robotic Process Automation, we talked mainly about back office work, now we are talking about creative work, customer contact, marketing content, and substantive development. Of course, in this case, the work done by people will be replaced by Generative AI, and the control over its operation will be the same people with other skills. But the game is about something else. The stakes are new business models and changing customer habits. The offer of completely new services and smarter products. Here is the chance for the "Holy Grail". What is it? In my opinion, it is the real era of Data Monetization using AI (generative AI). It is creating or modifying business models based on fully automated and intelligent decision-making processes. Everyone probably knows the saying that a frog boils in water because it doesn't recognize the temperature increase. It needs an impulse from the outside to save itself. Someone must "give it a hand". 

The process described in the book "The Innovator's Dilemma" by Harvard Business School professor and legend Clayton M Christensen, is when innovation leaders make changes to transform from a caterpillar into a beautiful butterfly. Over the past five years, the hot topic of Digital Transformation has lost its impact. But now it's back. Maybe we will call it something different. But right now, with the trend of generative AI, "frogs will jump out of the boiling pot". Right now, companies will believe that it's worth making this transformation and really change. Right now their customers expect it because they themselves are already using simple Generative AI tools and understand their benefits. They may not fully understand their drawbacks and consequences, but in the world, it is already the case that "bad money drives out good", or to paraphrase, worse quality AI results replace better human work. But that's a compromise humanity is ready for. Generative AI will be this helping hand for entrepreneurs. Thanks to it, they will improve their services and products, they will copy others, and optimize the use of their own knowledge resting in the data they collect.