With each day that passes, and each advancement in artificial intelligence language and vision technology, it is becoming more apparent that there will be three types of businesses in every industry: AI Native, AI Emergent and Obsolete.
I keep running through examples in my mind—retailers, ecommerce shops, marketing agencies, event businesses, media companies, law firms, medical practices, artists, writers, graphic designers, financial advisors, banks, insurance brokers and carriers, software makers, game and app developers, real estate brokers, consumer products makers, hotels, restaurants, manufacturers, distributors, educational institutions—and I can’t come up with an industry or business model where this won’t be true.
Take any of these (or your own business), and simply look for inefficiencies in repetitive processes, opportunities to drive revenue through greater predictive models (e.g. for customer acquisition, retention, or growth), and ways to unlock ideation and innovation through previously unattainable creative possibilities.
AI makes all this possible.
But, why now? What makes this moment in time different from the never-ending cycle of digital transformation?
Consider the following:
- Data, and our need to understand and act on it, continues to expand exponentially.
- Consumers demand convenience and personalization in both B2B and B2C marketing, sales, and service.
- Leadership expects ever-improving performance, while favoring efficiency in talent and the allocation of financial resources (especially as we teeter on the verge of a recession).
- Predicting human behavior and business outcomes are essential to reducing uncertainty. Boards, investors and company leaders hate uncertainty.
- The power and speed of cloud computing continue to rise, as a result the cost of building AI applications continues to fall, democratizing access and opportunity.
- Google, Microsoft, and Amazon continue to rapidly expand their AI research, teams, and cloud offerings, bringing AI innovations and technology to businesses of all sizes. And they’re not alone. Apple, Meta, NVIDIA, Salesforce, Adobe, IBM and other tech leaders have been ramping up AI acquisitions, investments, and solutions for the last decade or more.
- Venture capital money is pouring into startups that are building smarter, AI-powered solutions across every industry.
- The rate of AI-powered innovation is accelerating, opening up seemingly endless possibilities for entrepreneurs with the will and vision to drive change.
When you consider all these factors together, it’s the perfect storm for wide-scale disruption, and once-in-a-lifetime wealth creation and career advancement.
Related: Join us for Intro to AI for Marketers, a free, live class (every two weeks or so) that teaches you the basics of AI and gives you the resources to find use cases and tools for your company.
AI Native, AI Emergent or Obsolete
So, let’s explore the three options your company has moving forward:
1. AI Native
AI Native companies would not exist without the language, vision, and predictive applications AI enables. They are built from the ground up with AI at the core of the product / service, and likely deeply integrated into marketing, sales, service, and operations.
They are more resource (talent and money) efficient than their established competitors, they think bigger about what’s possible, they put a premium on data, and they build smarter businesses that will rise to the top of their industries.
Just pick any industry, find a niche in that industry, and build a smarter solution. If I was running a venture fund or studio, this would be my basic investment thesis.
To find AI Native companies, look no further than top startup accelerators like Y Combinator, 500 Startups, and Techstars.
You can also join the 1.3M other professionals on LinkedIn who follow Allie K. Miller, Global Head of Machine Learning Business Development, Startups and Venture at Amazon Web Services (AWS). It’s Allie’s job to stay tapped into the most promising technology startups, and she frequently shares insights with her millions of followers on LinkedIn and Instagram.
The opportunities are everywhere, and the future is already here. These next-gen, AI Native businesses will change everything in the months and years to come.
But, if you work for, or lead, an existing company, there is an opportunity to build a smarter business of your own.
Which brings us to the next type of company.
2. AI Emergent
AI Emergent companies are established organizations that move quickly to adopt and scale AI across all areas of the organization.
They have visionary leaders who see the rapid advancement in AI capabilities, and invest the resources needed to build a smarter business.
These emergent companies have expanding AI and machine learning (ML) talent pools (e.g in the marketing software space, Adobe has 300+ AI/ML employees according to LinkedIn), they innovate faster than the competition (potentially through venture studios or R&D labs focused on building AI tech), and they excel at personalization across marketing, sales, and service.
They have the data, customer bases and infrastructures to withstand the AI Native companies, if they move fast enough to transform. Plus, they have the money to acquire the AI Native companies before they grow to dominate.
Netflix is a classic example here. From DVD deliveries starting in the late 90s, to a dominant streaming company powered by AI in almost every facet of its business.
You can also look at what Dr. Andrew Ng and Landing AI are doing in manufacturing to operationalize AI powered visual inspection solutions for automotive, electronics, medical and pharmaceutical, and food and beverage companies. Ng is co-founder of Coursera, former chief scientist of Baidu, and founding lead of Google Brain. He and his team at Landing AI raised $57M Series A in 2021 to accelerate AI adoption in large enterprises.
In a sort of meta way, Ng is building an AI Native technology and consulting company (Landing AI wouldn’t exist without AI) that builds AI Emergent companies.
Obsolete companies wait for the business world to get smarter around them. They don’t seek knowledge about AI, their leaders resist change, they don’t run pilot tests to prove AI’s value, and they think of AI as just the next overhyped business buzzword.
By the time they act, the AI Native and AI Emergent companies have seized control of the market.
End of story.
If you work for (or run) one of these companies, it may be time to consider a career change.
Now, these Obsolete companies won’t all die off overnight, but over time their relevance and value will fade.
Consider marketing agencies as an example. Agencies are dependent on high levels of productivity and efficiency in order to achieve their profit goals, and the ability for these firms to retain and grow clients is dependent on performance.
Let’s say Agency A aggressively adopts AI across all its core services (e.g. analytics, copywriting, advertising creative, paid media management, email marketing, and graphic design). As a result, over a one-year period, Agency A is able to produce the same quantity of work in 20% less time, and the quality of work (human + machine) increases. Agency A redistributes the 20% time savings to invest in new marketing and sales campaigns that lead to compounding growth opportunities in the years ahead.
Then, over the next two years, Agency A applies AI to drive even more efficiencies in other areas of the business, including HR, finance and customer success. Agency A continually focuses its team on more fulfilling work including strategy, creativity, and client relationships, while the AI technology increasingly handles the data-driven, repetitive tasks.
Agency A has happy employees, loyal clients, and leaders leaning into a financially strong future.
Agency B sticks to the traditional agency model of relying on 70 - 80% utilization rates (i.e. its employees bill clients for 70 - 80% of their time each month) in order to achieve its goals. Agency B is so busy optimizing billable hours for its staff and cutting costs wherever it can that it doesn’t prioritize understanding and adopting AI until it’s too late.
Agency B has employees who feel overworked and undervalued, clients who are left wanting for greater value and results, and leaders who are wondering where it all went wrong.
While this example may be slightly dramatized for effect, the moral of the story is clear. Don’t be Agency B.
What’s Your Choice? AI, or Obsolete
AI doesn’t replace the need to develop valued products and services, create amazing customer experiences, build a strong brand, and continually invest in your talent and culture.
But, the competitive advantages gained by AI Native and Emergent companies, that also solve for strong business foundations, will be too great to overcome in the coming years.
Being Obsolete is bad for business, and your career.
Being bold, and charting a new path, is inspiring and unlimited.
There’s still time, but the window of opportunity will grow smaller.
Choose to be curious and explore AI. Choose to be an AI Native or AI Emergent company.
It’s a career choice I promise you will not regret.
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About Paul Roetzer
Paul Roetzer (@paulroetzer) is founder of PR 20/20, author of The Marketing Performance Blueprint and The Marketing Agency Blueprint, and creator of The Marketing Artificial Intelligence Institute and Marketing Score. Full bio.