October 8, 2024 • 6 mins
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.
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.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
All right, So are you ready to like really dive
deep today?
Speaker 2 (00:03):
Always up for a deep dive, let's do it?
Speaker 1 (00:05):
Okay, perfect? So today we're not just talking about AI,
you know, like the AI that picks your music or
runs your smart home. We're talking about generative AI. And
this is different. This is about how you, yes, you
listening right now, can use this tech to completely transform
your business like before anyone else even knows what's happening.
Speaker 2 (00:27):
It really is a game changer totally.
Speaker 1 (00:29):
And to help us like really understand this, we're looking
at some really insightful work by Alexander Ponimirski. He argues
that this isn't just another tech trend, it's like a
total shift like how we do business period.
Speaker 2 (00:41):
Yeah. He uses this really interesting analogy of the boiling frog.
Speaker 1 (00:45):
Oh okay, I've heard that one. Let's thot I do
the AI well.
Speaker 2 (00:47):
Pony Yuski's point is these shifts rarely happen overnight. It's
like a slow simmer. Yeah, and businesses often don't realize
until it's too late in their cook.
Speaker 1 (00:56):
Okay, I'm getting some serious boiling frog vibes already, But like,
how is this different from I don't know their rise
of e commerce, or like when social media became a thing.
Those were big, but businesses adapted.
Speaker 2 (01:07):
Right, But this time it's not about just adding a
new tool. It's generative. AI changes everything about how we work.
Like picture this. Instead of using AI to schedule social posts,
your marketing teams using it to create amazing ad copy,
you know, like tailored to different people and at a
scale you couldn't imagine before.
Speaker 1 (01:27):
So we're talking about like automating creativity here.
Speaker 2 (01:29):
That's wild exactly, and it's way more than marketing. Pony
Hirski talks about a clothing store using AI to understand
their customers, not just what they bought, but their browsing history,
what they're into on social media, even like weather and
local events, and they use this to figure out what
customers want before they even know it.
Speaker 1 (01:46):
Okay, that's kind of creepy but also kind of cool, right, So.
Speaker 2 (01:49):
They can offer personalized stuff and even new products based
on trends that haven't happened yet. That's the power of
data monetization.
Speaker 1 (01:57):
Okay, So like taking all that data companies have and
get into more money. But AI does all the.
Speaker 2 (02:02):
Work exactly, and the companies that figure this out how
to make money with their data and AI those are
the ones who win big. It's this paranoid advantage.
Speaker 1 (02:12):
This paranoid advantage thing has got me thinking, is it
like being scared of being left behind?
Speaker 2 (02:17):
Well not exactly. It's more like think of Andy Grove,
you know, the Intel CEO. His thing was only the
paranoid survive. It's about always looking for the next big change,
you know, before it hits you. So with AI, it's
experimenting now, figuring out how it fits into your business,
even if it's a little messy at first.
Speaker 1 (02:33):
So being okay with the unknown, even a little chaos
to come out ahead. But where do we even begin?
Speaker 2 (02:41):
Well, you got to start somewhere right find the spots
where AI can make a difference right away.
Speaker 1 (02:45):
Okay, So like with our clothing store example, what would
that look like?
Speaker 2 (02:48):
So maybe they use AI to like personalize their email marketing. Yeah,
you know, then they could try those AI chatbots to
handle customer questions instantly. It's all about taking those small
steps and getting comfortable.
Speaker 1 (03:00):
So instead of like overhauling everything, find those quick wins
that show what AI can do.
Speaker 2 (03:04):
Yeah, and Panimirski talks about those worst quality AI results
you might get. The thing is to look at those
as learning experiences, not failures.
Speaker 1 (03:14):
Right, because like this tech is still evolving.
Speaker 2 (03:16):
Right totally, and the more we use it, the more
data it gets, the better it'll get. But here's the thing.
The businesses that are already playing around with it, learning
from the mistakes, there could be way ahead when it
all catches up.
Speaker 1 (03:29):
So it's like building that knowledge base now, so when
everyone else is freaking out, we're already ahead of.
Speaker 2 (03:34):
The game exactly. And this isn't just about keeping up
with the competition either. It's about customers too. Think of it.
They're already using AI all the time, personalized recommendations on Netflix,
their voice assistance, even those fancy fitness trackers. They're going
to want that same level of like personalization and ease
from every business they deal with.
Speaker 1 (03:53):
So it's like AI is setting a new standard everywhere
and even customers are expecting it exactly.
Speaker 2 (03:59):
And the businesses that don't get it, there'll be that
frog in the hot water, not realizing until it's too late.
Speaker 1 (04:04):
Okay, that's a scary thought. So we've talked about why
generative AI is such a big deal, but what about
how to actually use it. How can businesses get that
paranoid advantage and make data monetization work for them?
Speaker 2 (04:18):
Well, it starts with changing how you think about AI.
Instead of seeing it as this like scary thing, see
it as a way to come up with new ideas,
be more efficient, and do things that weren't even possible before. Like,
you've got a question everything you thought you knew about.
Speaker 1 (04:33):
How business works, So be open to new ways of
doing things. It got it, But what are some actual
steps businesses can take? Like where do they even start?
Speaker 2 (04:41):
It's about, you know, really looking at your business and
finding those areas that are like prime for change. Are
the things you're doing that are like super manual, really repetitive?
What about those customer pain points? Yeah, you know, the
things that would be solved with a faster, more personal response.
That's where you start with AI.
Speaker 1 (04:58):
So look for ways to make things run and smoother,
do more with less, and like really level up that
customer experience.
Speaker 2 (05:04):
Exactly, and don't feel like you have to reinvent the wheel. Yeah,
you don't have to build some crazy complex AI system.
There's already tons of tools and platforms out there that
you can just plug in to what you're already doing.
Speaker 1 (05:16):
So test the water, see what works. Don't be afraid
to experiment a little exactly.
Speaker 2 (05:20):
And as you're trying things out, remember that data you
have that's gold. The better the data you feed your AI,
the better it's going to work. So think about how
you can organize and structure all that data you're sitting
on to make it AI ready.
Speaker 1 (05:34):
Like we're building the foundation for a smarter, more adaptable
business exactly.
Speaker 2 (05:39):
And that's what that paranoid advantage is all about. Always
pushing the limits, you know, being ready for change and
never getting complacent because with generative AI, things are always changing.
Speaker 1 (05:49):
So for our listeners out there who are ready to
embrace their inner paranoid and like really jump into generative AI,
what's the one thing you want them to remember?
Speaker 2 (05:57):
Don't just watch the future happen. Be a part of
making the tools are there, The possibilities are limitless, and
the time to act is now.
Speaker 1 (06:04):
Couldn't have said it better myself, Be bold, be curious,
and keep experimenting. That's a wrap on our deep dive
into the world of generative AI. Hopefully you're leaving not
just with a better grasp on this game changing tech
but also a little fired up, you know, and ready
to take action, I hope so.
Speaker 2 (06:22):
And ay, remember you're not in this alone. Yeah, there's
a whole bunch of innovators and change makers wrestling with
these same things. So connect, collaborate, and let's build the
future together.
Speaker 1 (06:31):
Here's to embracing the unknown and creating a future where
technology empowers us all. Until next time, keep exploring, keep
asking questions, and keep pushing the limits of what's possible.
All right, So are you ready to like really dive
deep today?
Speaker 2 (00:03):
Always up for a deep dive, let's do it?
Speaker 1 (00:05):
Okay, perfect? So today we're not just talking about AI,
you know, like the AI that picks your music or
runs your smart home. We're talking about generative AI. And
this is different. This is about how you, yes, you
listening right now, can use this tech to completely transform
your business like before anyone else even knows what's happening.
Speaker 2 (00:27):
It really is a game changer totally.
Speaker 1 (00:29):
And to help us like really understand this, we're looking
at some really insightful work by Alexander Ponimirski. He argues
that this isn't just another tech trend, it's like a
total shift like how we do business period.
Speaker 2 (00:41):
Yeah. He uses this really interesting analogy of the boiling frog.
Speaker 1 (00:45):
Oh okay, I've heard that one. Let's thot I do
the AI well.
Speaker 2 (00:47):
Pony Yuski's point is these shifts rarely happen overnight. It's
like a slow simmer. Yeah, and businesses often don't realize
until it's too late in their cook.
Speaker 1 (00:56):
Okay, I'm getting some serious boiling frog vibes already, But like,
how is this different from I don't know their rise
of e commerce, or like when social media became a thing.
Those were big, but businesses adapted.
Speaker 2 (01:07):
Right, But this time it's not about just adding a
new tool. It's generative. AI changes everything about how we work.
Like picture this. Instead of using AI to schedule social posts,
your marketing teams using it to create amazing ad copy,
you know, like tailored to different people and at a
scale you couldn't imagine before.
Speaker 1 (01:27):
So we're talking about like automating creativity here.
Speaker 2 (01:29):
That's wild exactly, and it's way more than marketing. Pony
Hirski talks about a clothing store using AI to understand
their customers, not just what they bought, but their browsing history,
what they're into on social media, even like weather and
local events, and they use this to figure out what
customers want before they even know it.
Speaker 1 (01:46):
Okay, that's kind of creepy but also kind of cool, right, So.
Speaker 2 (01:49):
They can offer personalized stuff and even new products based
on trends that haven't happened yet. That's the power of
data monetization.
Speaker 1 (01:57):
Okay, So like taking all that data companies have and
get into more money. But AI does all the.
Speaker 2 (02:02):
Work exactly, and the companies that figure this out how
to make money with their data and AI those are
the ones who win big. It's this paranoid advantage.
Speaker 1 (02:12):
This paranoid advantage thing has got me thinking, is it
like being scared of being left behind?
Speaker 2 (02:17):
Well not exactly. It's more like think of Andy Grove,
you know, the Intel CEO. His thing was only the
paranoid survive. It's about always looking for the next big change,
you know, before it hits you. So with AI, it's
experimenting now, figuring out how it fits into your business,
even if it's a little messy at first.
Speaker 1 (02:33):
So being okay with the unknown, even a little chaos
to come out ahead. But where do we even begin?
Speaker 2 (02:41):
Well, you got to start somewhere right find the spots
where AI can make a difference right away.
Speaker 1 (02:45):
Okay, So like with our clothing store example, what would
that look like?
Speaker 2 (02:48):
So maybe they use AI to like personalize their email marketing. Yeah,
you know, then they could try those AI chatbots to
handle customer questions instantly. It's all about taking those small
steps and getting comfortable.
Speaker 1 (03:00):
So instead of like overhauling everything, find those quick wins
that show what AI can do.
Speaker 2 (03:04):
Yeah, and Panimirski talks about those worst quality AI results
you might get. The thing is to look at those
as learning experiences, not failures.
Speaker 1 (03:14):
Right, because like this tech is still evolving.
Speaker 2 (03:16):
Right totally, and the more we use it, the more
data it gets, the better it'll get. But here's the thing.
The businesses that are already playing around with it, learning
from the mistakes, there could be way ahead when it
all catches up.
Speaker 1 (03:29):
So it's like building that knowledge base now, so when
everyone else is freaking out, we're already ahead of.
Speaker 2 (03:34):
The game exactly. And this isn't just about keeping up
with the competition either. It's about customers too. Think of it.
They're already using AI all the time, personalized recommendations on Netflix,
their voice assistance, even those fancy fitness trackers. They're going
to want that same level of like personalization and ease
from every business they deal with.
Speaker 1 (03:53):
So it's like AI is setting a new standard everywhere
and even customers are expecting it exactly.
Speaker 2 (03:59):
And the businesses that don't get it, there'll be that
frog in the hot water, not realizing until it's too late.
Speaker 1 (04:04):
Okay, that's a scary thought. So we've talked about why
generative AI is such a big deal, but what about
how to actually use it. How can businesses get that
paranoid advantage and make data monetization work for them?
Speaker 2 (04:18):
Well, it starts with changing how you think about AI.
Instead of seeing it as this like scary thing, see
it as a way to come up with new ideas,
be more efficient, and do things that weren't even possible before. Like,
you've got a question everything you thought you knew about.
Speaker 1 (04:33):
How business works, So be open to new ways of
doing things. It got it, But what are some actual
steps businesses can take? Like where do they even start?
Speaker 2 (04:41):
It's about, you know, really looking at your business and
finding those areas that are like prime for change. Are
the things you're doing that are like super manual, really repetitive?
What about those customer pain points? Yeah, you know, the
things that would be solved with a faster, more personal response.
That's where you start with AI.
Speaker 1 (04:58):
So look for ways to make things run and smoother,
do more with less, and like really level up that
customer experience.
Speaker 2 (05:04):
Exactly, and don't feel like you have to reinvent the wheel. Yeah,
you don't have to build some crazy complex AI system.
There's already tons of tools and platforms out there that
you can just plug in to what you're already doing.
Speaker 1 (05:16):
So test the water, see what works. Don't be afraid
to experiment a little exactly.
Speaker 2 (05:20):
And as you're trying things out, remember that data you
have that's gold. The better the data you feed your AI,
the better it's going to work. So think about how
you can organize and structure all that data you're sitting
on to make it AI ready.
Speaker 1 (05:34):
Like we're building the foundation for a smarter, more adaptable
business exactly.
Speaker 2 (05:39):
And that's what that paranoid advantage is all about. Always
pushing the limits, you know, being ready for change and
never getting complacent because with generative AI, things are always changing.
Speaker 1 (05:49):
So for our listeners out there who are ready to
embrace their inner paranoid and like really jump into generative AI,
what's the one thing you want them to remember?
Speaker 2 (05:57):
Don't just watch the future happen. Be a part of
making the tools are there, The possibilities are limitless, and
the time to act is now.
Speaker 1 (06:04):
Couldn't have said it better myself, Be bold, be curious,
and keep experimenting. That's a wrap on our deep dive
into the world of generative AI. Hopefully you're leaving not
just with a better grasp on this game changing tech
but also a little fired up, you know, and ready
to take action, I hope so.
Speaker 2 (06:22):
And ay, remember you're not in this alone. Yeah, there's
a whole bunch of innovators and change makers wrestling with
these same things. So connect, collaborate, and let's build the
future together.
Speaker 1 (06:31):
Here's to embracing the unknown and creating a future where
technology empowers us all. Until next time, keep exploring, keep
asking questions, and keep pushing the limits of what's possible.
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