Thoroughly enjoyed reading it! The problem with not adopting AI in core capability is if we don’t do it competitors will. So there is no way to stop it.
Gotcha. So when AI improvement affects your core competency, your moat is eroded. Hence, it's prudent to build a business that cannot be disrupted but instead improved via AI improvements that are coming.
In Wardley Map (https://en.wikipedia.org/wiki/Wardley_map) parlance, it’s to your advantage that you tailor some exposed part of your customer offerings to the left, “boutique” side of the map to differentiate yourself.
If you hitch that to commodity AI services, the lower end (more hidden) of your value chain gets pulled to the right and gets gobbled up by a ubiquitous utility/commodity service, opening you up to a lot more competitors. And more of your value gets eaten up by the utility.
It is quite ironic in a way that right now the big 4 are making the most amount of money in Gen AI, how long they can continue with that model or hold into the promise of how Gen AI will help their client in the near future.
I guess we need to see for another one or two years to see whether they can spin in a different way
Do you believe that they have think of this particular situation are going to happen to them in the near future? How near is depend on the speed at which AI will develop and I think it’s really fast
Do they have any plan or they just go with the flow similar to which they make money during the adoption of cloud?
There is no question that the productivity gains are worth the cost. I have been experimenting with subscriptions on Perplexity, CoPilot, OpenAi and Claude and doing ad hoc comparisons of the results. Mostly, I am using them for efficiency in recurring tasks, data table cleaning, chart analysis. I have not settled on one yet and will keep testing until I narrow it down.
Im making over 13k BUCKS a month working part time. I kept hearing other people tell me how much money they can make online so I decided to look into it. Well, it was all true and has totally changed my life. This is what I do....quicksrich.blogspot.com
Great article. I see this happening in healthcare. Startups are increasingly focused on conducting tests, deploying AI chatbots, and leveraging data to generate insights. While it's now "possible" and "cool" to offer tech-driven health insights, the true winners will be those who combine deep, proprietary expertise in healthcare—making it their core product—with the strategic use of tech and AI to enhance personalization and scale.
I think that was a forward looking move to capture value on upcoming improved capabilities. I find it odd that it’s the consumer pricing that was increased. But maybe there is a corresponding API or enterprise price increase
Gilettes' razor - razor blade strategy will forever stand out as bargaining power through control of complement. Printers - printing cartridge, and even coffee makers - coffee pods help expanding the list. AIs' subscription model (razor) bargaining power may be neutralized by creating complementary Small Language Model (razor blade) for both productivity and economy of scale.
That's one way of looking at it. But complements aren't just consumer-facing products, they can also be complementary capabilities (e.g. customer support vs core product as in Klarna) or complementary points in the customer journey (e.g. monetizing product purchase vs monetizing product usage).
Good points for the long term, but short term, early adopters who realise those productivity gains get super normal profits. That is the product you provide can be produced for less, but before there has been downward pressure on prices. (Because your competitor has not yet made the same productivity gains) So there absolutely IS value in making efficiencies, as long as you are one of the first movers.
Yes, for a certain period. And that's what everyone is excited about. My point doesn't negate that. It just says that if you're focused only on that, you get screwed in the long term.
Got you. However isnt the long term reward that you simply continue to exist? Auto makers that didnt embrace automation for example would have been out performed by those that did.
I think this is spot on:
"It’s still possible to enhance profits and secure a stronger competitive advantage with generative AI in your core product- but only if you leverage it to build a proprietary product advantage within your business. The key is ensuring that this advantage is developed internally, rather than relying on a third-party supplier of AI."
Lots of companies are going to be subscribing to ChatGPT for teams or Co-pilot 365 because they think that will mean they have an "AI strategy" the reality is that AI an exercise in organisational change vs something you can buy off the shelf.
You need to embrace tech to have a chance to stay in the game. But you need to adopt one of the 3 strategies to actually win the game. I am not saying that you should not do the first one.
Thoroughly enjoyed reading it! The problem with not adopting AI in core capability is if we don’t do it competitors will. So there is no way to stop it.
Point is that it becomes an expected utility function - a checkbox - and not a strategic differentiator.
Precisely!
Gotcha. So when AI improvement affects your core competency, your moat is eroded. Hence, it's prudent to build a business that cannot be disrupted but instead improved via AI improvements that are coming.
In Wardley Map (https://en.wikipedia.org/wiki/Wardley_map) parlance, it’s to your advantage that you tailor some exposed part of your customer offerings to the left, “boutique” side of the map to differentiate yourself.
If you hitch that to commodity AI services, the lower end (more hidden) of your value chain gets pulled to the right and gets gobbled up by a ubiquitous utility/commodity service, opening you up to a lot more competitors. And more of your value gets eaten up by the utility.
It is quite ironic in a way that right now the big 4 are making the most amount of money in Gen AI, how long they can continue with that model or hold into the promise of how Gen AI will help their client in the near future.
I guess we need to see for another one or two years to see whether they can spin in a different way
That's when things shake out. We saw that with adoption of cloud as well. Tech soon becomes tables takes
Do you believe that they have think of this particular situation are going to happen to them in the near future? How near is depend on the speed at which AI will develop and I think it’s really fast
Do they have any plan or they just go with the flow similar to which they make money during the adoption of cloud?
There is no question that the productivity gains are worth the cost. I have been experimenting with subscriptions on Perplexity, CoPilot, OpenAi and Claude and doing ad hoc comparisons of the results. Mostly, I am using them for efficiency in recurring tasks, data table cleaning, chart analysis. I have not settled on one yet and will keep testing until I narrow it down.
Salvatore Tirabassi
Fractional CFO Services @ CFO Pro+Analytics
Im making over 13k BUCKS a month working part time. I kept hearing other people tell me how much money they can make online so I decided to look into it. Well, it was all true and has totally changed my life. This is what I do....quicksrich.blogspot.com
Great article. I see this happening in healthcare. Startups are increasingly focused on conducting tests, deploying AI chatbots, and leveraging data to generate insights. While it's now "possible" and "cool" to offer tech-driven health insights, the true winners will be those who combine deep, proprietary expertise in healthcare—making it their core product—with the strategic use of tech and AI to enhance personalization and scale.
Important point: ChatGPT didn’t change price of their existing subscription, they’ve added another one on top of Plus.
I think that was a forward looking move to capture value on upcoming improved capabilities. I find it odd that it’s the consumer pricing that was increased. But maybe there is a corresponding API or enterprise price increase
Gilettes' razor - razor blade strategy will forever stand out as bargaining power through control of complement. Printers - printing cartridge, and even coffee makers - coffee pods help expanding the list. AIs' subscription model (razor) bargaining power may be neutralized by creating complementary Small Language Model (razor blade) for both productivity and economy of scale.
That's one way of looking at it. But complements aren't just consumer-facing products, they can also be complementary capabilities (e.g. customer support vs core product as in Klarna) or complementary points in the customer journey (e.g. monetizing product purchase vs monetizing product usage).
Good points for the long term, but short term, early adopters who realise those productivity gains get super normal profits. That is the product you provide can be produced for less, but before there has been downward pressure on prices. (Because your competitor has not yet made the same productivity gains) So there absolutely IS value in making efficiencies, as long as you are one of the first movers.
Yes, for a certain period. And that's what everyone is excited about. My point doesn't negate that. It just says that if you're focused only on that, you get screwed in the long term.
Got you. However isnt the long term reward that you simply continue to exist? Auto makers that didnt embrace automation for example would have been out performed by those that did.
I think this is spot on:
"It’s still possible to enhance profits and secure a stronger competitive advantage with generative AI in your core product- but only if you leverage it to build a proprietary product advantage within your business. The key is ensuring that this advantage is developed internally, rather than relying on a third-party supplier of AI."
Lots of companies are going to be subscribing to ChatGPT for teams or Co-pilot 365 because they think that will mean they have an "AI strategy" the reality is that AI an exercise in organisational change vs something you can buy off the shelf.
You need to embrace tech to have a chance to stay in the game. But you need to adopt one of the 3 strategies to actually win the game. I am not saying that you should not do the first one.