10x and cheaper in an AI world
10x and cheaper in an AI world
Almost 7 years ago to the day, I wrote a blog post called "How to build an enduring, multi-billion dollar business: create a 10x product + recast incumbent cost structures".
In it I argued that to create a mass-market company, it wasn't enough to create a 10x better product than any substitute. The magic was creating a 10x better product while recasting the cost structure of providing that product or service in order to provide it cheaper to the consumer or business.
To do this requires some kind of technology catalyst. This recipe was what was behind ecommerce (Amazon, Netflix), peer-to-peer marketplaces (Airbnb, Transferwise, Uber), or full-stack startups (WhatsApp).
I speculated that the next wave would be catalyzed by AI or VR.
7 years later, here we are. It's interesting now to think about the deflationary pressure AI could provide to a number of categories as it continues to mature, and what startups might emerge that use AI to recast cost structures of incumbents to create a new 10x experience, cheaper.
Certainly it’s easy to go down this list of Service sector value added to the Gross Domestic Product (GDP) of the United States of America in 2021, by industry, and start to imagine where the startups might emerge… exciting times.
But 10 years later, an Uber//lyft ride is more expensive than a conventional yellow taxi? Where does the short term deflation caused by over investment fit in long term business sustainability?