Which business model will catch the next wave?

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Charlie Munger talked about competitive destruction – the process by which new businesses come along and destroy older ones – often built using new and different technology.

Being one of the first to market can be a good thing in this situation.

Using a surfing model, if a business can get up and catch the wave, they could ride it for a long time, making profits on the way.

Intel did it with microprocessors, Microsoft with desktop operating systems, Apple with smartphones and Google with search.

Products based on artificial intelligence (AI) and machine learning might seem good candidates for the next wave.

Take the way in which we use mobile phones, for instance.

Tools like predictive text have been around for a while – but phones are used for much more than talking or texting.

Navigation systems on them have gone from route planning to real time route optimisation, with suggestions on how to change routes in the middle of a journey based on travel patterns in the area.

Translation is another area being transformed by technology.

For gist translation – where what we need is an understanding of what a document says in a different language – the systems built into browsers and search engines do a remarkable job.

Machine learning may provide the solution to spam emails.

Microsoft Outlook’s clutter service means that virtually all spam type emails are filtered out and never hit the inbox.

Generic newsletter, marketing and sales emails simply can’t interrupt us any more.

Some of us don’t worry about scheduling or planning things – the entries turn up in our diaries and we can rely on our phones to tell us where we are going and when to set off.

These tiny changes to the way in which machines help to organise and optimise our days are happening in a barely recognizable way.

But they are becoming also becoming an inextricable part of how we go about our daily business.

These changes signal a groundswell that is expected to turn into a tidal wave as AI affects everything from law and medicine to transportation and sustainability.

The question that individuals and organisations need to consider is how they will fit into a world where work requires hybrid human-machine skills.

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