New Eye-opening Realities For Technology Companies

We are witnessing an AI arms race, forever changing how companies compete.

In 2023, I raised funds for a company that built a new technology. One of my board members suggested we use a popular LLM to help develop the code. At the time, LLMs were too simplistic to do what we needed. However, the implications of having machines write code were not lost on me.

Much like going to space in the 1960s, personal computers in the 1980s, and dot-coms in the 1990s, today’s AI companies are working hard to advance the technology quickly.

The result is a change in how creative works are built, most notably in terms of intellectual property.

A new company would have a nearly impossible time competing in technology. I suspect this will also mean more competition for companies based on creative work, as it takes less skill to arrive at a similar result.

Making it easier to build technology does not mean all is lost for the startup community. Instead, it signifies that we need a new model to compete. To find one, we can see how other companies selling commodities do it.

Bread

Anyone can do a quick Google search for a recipe and bake a decent loaf of bread. After some practice, most can deliver results similar to those of a professional bakery. However, we still have bakeries with healthy revenue.

Water

A person with a filter pitcher can have nearly unlimited water for pennies. However, an entire aisle at the grocery store is filled with brands selling bottled water at various price points. Some of these companies are thriving despite selling a commodity.

Computers

What started as an industry based on making clones of the IBM PC resulted in the generalization of computers. Despite this, companies like Dell, HP, and Apple managed to do well despite selling a near commodity.

Experience

Bakers, water bottlers, and computer manufacturers all compete based on customer experience. Companies like Dunkin Donuts, Liquid Death, and Apple attract a loyal following. People in these camps buy the product, tell others about it, and evangelize it, regardless of knowing they are just buying a commodity.

Conclusion

The future will be a long tail of technology brands based on specific demographics. Valuations, revenue, and market adoption will be based on who offers the best customer experience for their chosen market. Savvy tech companies will emulate consumer behemoths like Coke and Pepsi, which offer multiple experiences for specific market segments.

How are you going to compete in this next evolution of technology?