Must Read
This time, I want to highlight the best piece of AI writing on the web in the past few days, which is Matt Turck's 2021 Data/AI/ML Landscape report. If you haven't read it you should go do that now.
But I want to highlight the implications of one piece of Matt's post that I think isn't getting enough attention in the venture and tech startup space.
As we said in prior years, the fundamental trend is that every company is becoming not just a software company, but also a data company.
Historically, and still today in many organizations, data has meant transactional data stored in relational databases, and perhaps a few dashboards for basic analysis of what happened to the business in recent months.
But companies are now marching towards a world where data and artificial intelligence are embedded in myriad internal processes and external applications, both for analytical and operational purposes. This is the beginning of the era of the intelligent, automated enterprise – where company metrics are available in real time, mortgage applications get automatically processed, AI chatbots provide customer support 24/7, churn is predicted, cyber threats are detected in real time, supply chains automatically adjust to demand fluctuations, etc.
Every company is becoming a data company. The reason that matters is that very few places have a "data first" or "AI first" view of their business. Our mental models for thinking about AI and Data are legacy mental models from the recent history of SaaS. We think of AI as a software tool to do one thing instead of as an automation that can drive a smart workflow. We think of data as something to be retrieved when humans need it rather than an asset to use for prediction and automation.
This is why I recommend "Competing in the Age of AI" and "The AI FIrst Company" to anyone who asks about how to manage a business in an AI world. Today I want to quickly highlight 3 key changes this brings to how you should think about the world.
Three (3) key changes managing a business in an AI world brings
1. When data is your asset, collecting more data is a major goal and should be a by-product of everything you do. This requires building new interfaces and processes that annotate and label things that don't get captured today.
2. When data is your asset, launching new products into new markets is driven by your data capabilities more than your GTM capabilities. This is very different from a SaaS world where selling into one market segment was what drove your next gen product ideas. Now your product ideas stem from the data you have and where it can take you.
3. Moving from a traditional operating model to a digital one is painful and slow, but valuable on the other side. It's best captured by this graph from one of the books mentioned above.
The world is changing and while I see companies paying lip service to it, I don't see many companies actually adjusting to the new reality. This is your chance to jump ahead of the competition, so don't wait until it's too late. The time to be a data-first company is now.
Thanks for reading.
