I wrote Part 1 of this post with a warning about the potential future danger of a monolithic artificial intelligence, vs. a distributed self-regulating model:
In my view, AI-driven intelligent agents should be experts in narrow fields, can share or sell their expertise in real-time micro transactions, and be subject to the control of human arbiters of right and wrong. My ideal model provides increased sharing of diverse sources of knowledge, with self-regulating biological models, including, and centered-around, human minds.
The movies have done a great job of showing us what doomsday looks like. Conversely, you need look no further than your own body or backyard to see what the bio diversity model looks like – we are all miraculous products of it.
But if you’re a smallish company, what can you do to combat the likes of Google, IBM or Amazon? What are the organizing principles that will let you compete and create a sustainable competitive advantage vs. those behemoths?
(By the way, I’m writing this because I’m a champion for the underdog, a believer in Small is Beautiful, and I want to put my money where my mouth is.)
Here’s how I would compete:
- Partner with the big guys. Not just to keep your enemies close, but because they will be players in pretty much any future scenario, and they’re always willing to partner and share technology with innovators. Plus, there’s always the buy-out scenario.
- Pick a niche or two and exploit the heck out of it:
- I think Automotive is great. I wrote about Google’s play in this market. Turns out they’re also doing Android for cars. But the race is far from over. I predict we’ll be spending more and more time in our cars, and more of that time will be connected time.
- I really like the idea of building expertise (and tools & services) to serve businesses that are creating branded virtual agents. Domino’s Dom and Alaska Airlines’ Jenn are great examples. Even though Siri is a general-purpose assistant, she’s not for everyone. As Will.i.am will attest, his cuff has 4 kilowatts of DAF! Kidding aside, these examples indicate that real companies (and artists) think there are opportunities for creating lasting relationships via these devices/services, and there may well develop an ecosystem of virtual agents, some general purpose and some with the domain expertise of a Dom or a Jenn.
But what about the argument that Google, IBM and the others have deep pockets and can afford to buy customers and wait a long time? How to compete?
Well, Dom and Jenn are already using one potentially successful approach. Getting their software into the marketplace for small up-front fees, and hopefully a revenue share, in exchange for capturing the transaction data.
You have to cover your up-front costs, taking a rev-share is like syndication dollars for an actor (potentially very juicy); but I think the real money – the IP – is in the data. Owning (or sharing) rights to the customer interactions, not for advertising, but for behavioral analysis and making your own systems smarter, is the goldmine here.
If I were the developer of Dom, I would scrutinize every data point about every transaction so I could make Dom the all-knowing, all-seeing virtual G-d of pizza. This is how to increase valuation over time, valuation that will enable you to play with the big fellas.
In my next post, I’m going to address the big craze at CES – wearables – specifically, health and fitness gadgets, and why I’ll be betting heavily on them.