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businesseducationtechnology
Product of the Future
About this Episode
"Product of the Future: The Competitive Advantage in the World of Generative AI"
When I published my book, "SPEED: No Limits in the Digital Era" (www.speednolimits.com) in 2019, many people inquired about a somewhat misunderstood concept - the "Product of the Future." I introduced this idea to illustrate how the products and services of the third and fourth industrial revolutions differ significantly. I provided an example at the time: In the third industrial revolution (and all preceding ones), an entrepreneur's competitive advantage was his experience.
This isn't about the innovators creating groundbreaking technologies, but about 99% of businesses worldwide that leverage various products to offer their services or to create other products. Consider two bakeries on the same street in a city of one million residents. One displays the words "In Business Since 1890" on its signboard. Their competitive edge over the newly established bakery is experience. They have gathered customer feedback over the years and continuously improved their offerings. Even if the two bakeries use identical ovens, products, and recipes, the experience becomes the competitive advantage. Consequently, entrepreneurs often "acquire experienced employees." This approach has been the norm for centuries. In the fourth industrial revolution, however, the product contains both knowledge and experience (of hundreds of millions of people). We have seen the fusion of these two elements in various "smart products." For instance, a smartphone camera processes pictures according to the most suitable format and color for social media platforms to maximize likes or engagement. This is the "Product of the Future."The question then arises: Where is the competitive advantage between two photographers using the same tool - the Product of the Future? Is it price, network, or marketing?
Today, these factors are more crucial than experience or knowledge - these can be purchased, bluntly speaking. Lately, there's been much buzz about Generative AI. In my view, it's a breakthrough, not necessarily in technology or discovery, but in daring to create the Product of the Future. Andrew Lowe and I recently attended a lecture at MIT where Danny Lange compared ChatGPT to the 1957 launch of Sputnik by the USSR. This seemingly small "wheel" with four "sticks" made the world realize that someone (in this case, the USSR) was gaining dominion over space. Did Sputnik have stunning functionalities and capabilities? No, but that wasn't the point. It was about demonstrating dominance and signaling that satellites are the technology of the future, which indeed they are. The situation with Generative AI is similar. The fusion of knowledge and experience in one product makes this technology revolutionary. Its general availability, ease of use, and operation speed make it extremely useful. So, what will be the competitive advantage in the era of Generative AI? What will distinguish two text writers using GPT chat? Of course, a third writer who does not use it won't stand a chance from the start. The answer, though seemingly simple and obvious, might surprise and shock many, especially those clinging to their business models. The answer lies in usage, the business model, and the operating model. The SPEED to adapt and the conscious courage to do so will be pivotal. Those who remain stuck in "yesterday's world" will quickly lose margins, customers, and existing competitive advantages to new, agile businesses based on APIs and applications. The competitive advantage will arise from the ability to "unlearn" habits and understand new customer needs and behaviors. It will be directly proportional to the implementation of scalable changes in business models and the utilization of the human potential for tasks that Generative AI cannot yet perform.
When I published my book, "SPEED: No Limits in the Digital Era" (www.speednolimits.com) in 2019, many people inquired about a somewhat misunderstood concept - the "Product of the Future." I introduced this idea to illustrate how the products and services of the third and fourth industrial revolutions differ significantly. I provided an example at the time: In the third industrial revolution (and all preceding ones), an entrepreneur's competitive advantage was his experience.
This isn't about the innovators creating groundbreaking technologies, but about 99% of businesses worldwide that leverage various products to offer their services or to create other products. Consider two bakeries on the same street in a city of one million residents. One displays the words "In Business Since 1890" on its signboard. Their competitive edge over the newly established bakery is experience. They have gathered customer feedback over the years and continuously improved their offerings. Even if the two bakeries use identical ovens, products, and recipes, the experience becomes the competitive advantage. Consequently, entrepreneurs often "acquire experienced employees." This approach has been the norm for centuries. In the fourth industrial revolution, however, the product contains both knowledge and experience (of hundreds of millions of people). We have seen the fusion of these two elements in various "smart products." For instance, a smartphone camera processes pictures according to the most suitable format and color for social media platforms to maximize likes or engagement. This is the "Product of the Future."The question then arises: Where is the competitive advantage between two photographers using the same tool - the Product of the Future? Is it price, network, or marketing?
Today, these factors are more crucial than experience or knowledge - these can be purchased, bluntly speaking. Lately, there's been much buzz about Generative AI. In my view, it's a breakthrough, not necessarily in technology or discovery, but in daring to create the Product of the Future. Andrew Lowe and I recently attended a lecture at MIT where Danny Lange compared ChatGPT to the 1957 launch of Sputnik by the USSR. This seemingly small "wheel" with four "sticks" made the world realize that someone (in this case, the USSR) was gaining dominion over space. Did Sputnik have stunning functionalities and capabilities? No, but that wasn't the point. It was about demonstrating dominance and signaling that satellites are the technology of the future, which indeed they are. The situation with Generative AI is similar. The fusion of knowledge and experience in one product makes this technology revolutionary. Its general availability, ease of use, and operation speed make it extremely useful. So, what will be the competitive advantage in the era of Generative AI? What will distinguish two text writers using GPT chat? Of course, a third writer who does not use it won't stand a chance from the start. The answer, though seemingly simple and obvious, might surprise and shock many, especially those clinging to their business models. The answer lies in usage, the business model, and the operating model. The SPEED to adapt and the conscious courage to do so will be pivotal. Those who remain stuck in "yesterday's world" will quickly lose margins, customers, and existing competitive advantages to new, agile businesses based on APIs and applications. The competitive advantage will arise from the ability to "unlearn" habits and understand new customer needs and behaviors. It will be directly proportional to the implementation of scalable changes in business models and the utilization of the human potential for tasks that Generative AI cannot yet perform.
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