Digital start-ups have upper hand over legacy companies for AI transformation.
Preface
Page xi: Exponential growth is usually invisible. It confronts you if you don’t acknowledge.
Page xi: AI is like Covid-19 virus that your business must get infected or your competitor will.
Page xxiv: AI powered firms does not rely on single algorithm. They focus on structured process that can deploy many AI solutions.
Page xxv: Becoming AI ready means keeping process simple and avoiding complexity. At the core, it’s a combination of right data, machine learning (ML) and algorithm.
1 – The Age of AI
Page 3: Every field is going to affect with AI. That includes art.
Page 4: Weak AI performs human’s repetitive task. Strong AI matches or beats human effort.
Weak AI is enough for company to start the transformation.
Page 5: Film photography beat painting. Digital photography beat film photography and gave birth to social media. The photos from social media are now feeding AI for image generation and facial recognition.
Page 6: The collision between digital and traditional technology not only creates higher quality, but also it changes value proposition for the customer needs.
Page 9: Amazon is a game changer in competition and transforming economy. They sell traditional goods on digital platforms.
Traditional company’s operating model becomes difficult as they scale over time. More employees leads to quality issues.
Amazon has upper hand over legacy firms because they have digitized their operating risk. Their order taking system can scale indefinitely.
Page 18: AI is new age that will transform the economy.
Analog and digital worlds are not separate anymore. AI is merging them.
Page 19: AI will kill traditional skills.
AI will give birth to new opportunities for start-ups, established firms, entrepreneurs, social, artists, economy and politics.
2 – Rethinking The Firm
Page 25: Ant Financial, world’s largest FinTech’s secret is to leverage data to learn about customer needs and serve back via digital services.
Page 26: Ant Financial is great example of AI-powered company where ten thousand employees server 700 million users.
In contrast, American Express need 200,000+ people to server 70 million customers.
Three companies that successfully transformed into AI ready for the future.
- Ant Financial for banking technology
- Ocado for grocery
- Peloton for fitness
Page 27: The company’s value depends on two things:
Business model for creating and capturing value using product or service.
Operating model for delivering value to customer with right deployment method and market positioning.
Page 28: Company must identify precise customer problem to approach value creation before its positioning in the market.
Value could be different for same product such as car.
A Toyota’s value is reliability and affordability.
A Ferrari’s value is luxury and speed.
An Uber’s value is to share ride and save time.
Idea for unique value proposition – pay as you value.