AI startups require new strategies: This time it's different
longform.asmartbear.com
longform.asmartbear.com
So, the Shirky principle: incumbent companies are dedicated to keeping around the problems that they solve. Startups get to define the problem differently, and can solve a problem that an incumbent is dependent on.
The internet is probably the closest the comparison, which is why I get your point, but far off in terms of the scale of the implications.
The hardest thing about AI is that we don't have intuitions for it. It will make the exponential growth that the internet brought look linear by comparison.
Assembly lines make one thing efficiently, by breaking down the complete task into small units such that no single person needs much training. This is basically what UNIX has been doing since at least the command line pipe operator was invented.
3D printers are general purpose and can kinda make anything in principle, but in practice the cheap ones are very limited while the one for building a rocket engine is priced at "hire a team of full-time engineers to build and maintain it", and in any case these are not a good choice for reliable mass production. This seems like a better, though still flawed, pattern match to AI.
It’s unfortunate that he doesn’t actually delve into new strategies.
Anyone know of any actually good articles on plausible AI startup strategies?
In past disruptions the startups could all have similar playbooks because one strategy was applicable everywhere: "do X, but on {web,mobile}". Now there's no common strategy that applies to all markets because the incumbents are already integrating AI more rapidly than you'll be able to bootstrap a whole product. This means that each startup needs a strategy that is tailored to the specific incumbent they're trying to unseat.
I would argue that they do in some ways. For example, with AI it's not about adopting vs. not adopting AI, but rather degree of adoption.
It's easy to superficially integrate AI, but creating a competitive product predicated on post-AI assumptions requires rebuilding it from the ground up, which is not in the rational self-interest of incumbents.
In fact, this is even harder than the decision whether or not to adopt new technologies because with AI you can fool yourself into thinking you've gone far enough.
AI is such a game-changer that we have no idea what 'far enough' means yet. So the best we can do is run in that direction as fast as possible, which is hard to do with the baggage of an existing business. Startups are uniquely suited to this because they arebets on a different future.
That said, it is a fantastic article -- Jason always puts out insightful, high quality writing.
And I agree with your push-back on that. Indeed, perhaps when a startup is able to say "ahh, but HERE Disruption CAN work because...", that's where a good strategy can emerge.
But the incumbents succeeded in capturing most of the money involved with mobile. And only became more powerful after it.
I think the social media startups like instagram are a good example of the startups from the mobile era.
this feels like an oversimplification. Its like saying the internet was in the solution space, companies were still selling things and now they needed to use the internet as well.
I think there's a ton of new scenarios that open up some are already underway like self driving cars and others further down like home robots that function like butlers.
Also companies that leverage AI in the best possible way for a domain will differentiate and that does open up the possibility of disrupting incumbents. It may get to be that to set up a business you pay for Data and the Model until you have critical mass to generate your own data.
I'm sure it was just on Google images or something, just funny how instantly recognizable that shape is, I don't think I've seen it for years.
A more logical conclusion would be that significant market disruption is more likely to occur outside of the world of AI.
I know its heresy to suggest that AI isn't the be-all and end-all of technical innovation but imagine for a moment that the incumbent's bet on AI actually ends up harming the long-term value proposition of their products. What if people get increasingly annoyed with impersonal and inauthentic interactions/content. What if the mass-adoption of generative AI pollutes consumer trust.
It stands to reason that there's a huge potential in startups not focusing on AI. There's an increasing segment of users who would happily opt for "low-tech" options that solve a problem well. If the rules for disruption don't hold with AI tech, then the high-ground startups should be searching for is perhaps on a different hill.
A perfect storm is possible since incumbents have gone all in on the same technology and strategy. When everyone's following the same playbook, strategic disruption could upend multiple incumbents at the same time. I think that's a much more exciting prospect than trying to go toe-to-toe with giants.