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Good article highlighting what most of us have probably felt about the AI market - ie incumbents don’t have Innovators Dilemma here. It’s unfortunate that he d

Good article highlighting what most of us have probably felt about the AI market - ie incumbents don’t have Innovators Dilemma here. It’s unfortunate that he doesn’t actually delve into new strategies. Anyone know of any actually good articles on plausible AI startup strategies?

lolinder 3y ago
Delving into new strategies wouldn't make sense given the thesis of the article—what your strategy is must depend entirely on the specific market you're targeting. There is no generally applicable advice because each market is completely different. 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.
dwallin 3y ago
You need to look at second order effects and how AI might intersect with other emerging technologies. There will be fundamental shifts that change market dynamics, we just don’t know how they will happen yet. Incumbents have a strong belief in AI being transformational but since no one truly knows how those changes will be realized, so they are mostly all hedging their bets, investing in institutional knowledge and low-hanging fruit. They cannot generally afford to make a “big bet”. If you can develop a strong hypothesis about a non-obvious shift you can get ahead of the curve in a significant way on an emerging, or transforming market. Look for things that are valuable and/or expensive that might become a commodity. Look for technologies, business models and approaches that might be considered inferior or non-viable by incumbents, but that might experience synergies with an ai-powered future that changes the base assumptions.
gmays 3y ago
> incumbents don’t have Innovators Dilemma here 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.
- smartbear 3y ago
  Thanks so much! 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.

lolinder 3y ago

Delving into new strategies wouldn't make sense given the thesis of the article—what your strategy is must depend entirely on the specific market you're targeting. There is no generally applicable advice because each market is completely different. 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.

dwallin 3y ago

You need to look at second order effects and how AI might intersect with other emerging technologies. There will be fundamental shifts that change market dynamics, we just don’t know how they will happen yet. Incumbents have a strong belief in AI being transformational but since no one truly knows how those changes will be realized, so they are mostly all hedging their bets, investing in institutional knowledge and low-hanging fruit. They cannot generally afford to make a “big bet”. If you can develop a strong hypothesis about a non-obvious shift you can get ahead of the curve in a significant way on an emerging, or transforming market. Look for things that are valuable and/or expensive that might become a commodity. Look for technologies, business models and approaches that might be considered inferior or non-viable by incumbents, but that might experience synergies with an ai-powered future that changes the base assumptions.

gmays 3y ago

> incumbents don’t have Innovators Dilemma here 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.

smartbear 3y ago
Thanks so much! 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.