I was listening to this SXSW talk by Ian Beacraft and there is data he presented that made me sit up.
45% of CEOs (at Davos) feel their companies won't survive the next decade. To be fair, in 2023 it was 39%. This is what stood out for me - The reinvention imperative appears to be accelerating.
So while everyone is aware of the need to reinvent, I think there is a foundational challenge.
I had not heard of Martec's law but anyone who has worked with large enterprises or even in smaller companies can relate to the above. People don't like change. So when technology changes at an exponential rate but people change at a much much slower rate, we will have this huge gap that I think talks to why CEOs feel their organizations won't survive in 10 years.
Another interesting data point Ian presents talks about the rate of change. I am someone that loves change. In my last 10 years I did 10 different roles. Every year, I'd be doing something different. But even I cannot fathom this stat -
No one can predict the future and no one knows if the above is true or not but even if he is off by a factor of 5.. that is 20 years of change in 5 years. Just to put this in perspective -
In 5 years we go from Internet to SaaS to mobile to cloud to social to AI to Crypto to GenAI. Imagine that shrunk into 5 years. If his prediction is accurate, 100 years ago we had just come out with the TV. Imagine all the technological enhancements in the last 100 years and all that happened in 5 years!!!
I know I can't keep up with all that is going on with just GenAI and I am spending a lot of my time on just this one topic, imagine it is 2045 and in the next 5 years we'd have AGI, Quantum computing, Nuclear Fusion, Fully Self Driving cars, a colony on mars!! That is what 100 years of change in 5 years could look like.
Bottomline organizations with humans doing work will never be able to keep up with this rate of change. The disruptors will be organizations that have agents monitored by humans doing the work (human in the loop).
I know it is easy to dismiss this but we have seen this play out in factories. The image on the left is a factory floor from the 60s and on the right what a factory floor looks like today. Factories have much fewer humans and many more bots. The same is true in agriculture etc.
One more thing Ian talks about is the improvement in the GenAI models. I know a lot of us use GenAI today and while impressed, we cannot imagine that it will really be able to deliver to the hype. Here too, the exponential rate of technology change plays a role.
Imagine if the models in 5 years are 100,000 times more capable!! Reminds me of when IBM created Deepblue to play chess and it beat Kasparov in 1997. It was first created in 1985. Then there was a lull and once AI happened, in 2017 AlphaZero learnt chess in 24 hours and beat the best chess programs. Imagine all that happening in 2 years!!
Just to put 100000 more capable in context that is like comparing an iPhone to a 1990s desktop PC. So imagine a version of ChatGPT in 5 years that is that much more capable than ChatGPT from today!!
The other parallel I draw from this is evolution. Human's with their technological progresses are driving change at an unprecedented rate and a lot of species are not able to evolve fast enough and go extinct. I think we are on the precipice of doing this to ourselves in the workplace. We are not going to be able to keep up with this rate of change and organizations as we know them will go extinct.
So, connecting some dots - if we know that the rate of change is going to be exponential and if we know that humans cannot handle this rate of change and if we know that organizations with humans are not going to be able to handle this rate of change, we can see why CEOs feel their companies are not viable in 10 years.
We will have to create organizations that are built with an AI first DNA. Every function has to be rethought with an AI first lens and humans supporting that. I think we will see some obvious functions that will go through this transformation and as organizations learn from this, they will start adding more AI.
There will be new upstart companies that are AI first, have an agent based DNA etc. that will start innovating with new operating models and the larger companies will face an existential crisis.
I don't see this happening in 5 years but in 10 years, I can definitely see there being new types of companies, that start looking like a modern day factory or warehouse. Humans and AI agents working together but most of the work being done by AI agents.
Bottomline, I know a lot of people have talked about a 1 person billion dollar company and I think this is going to become a reality because we cannot keep up with the rate of change.