FIR 95: Optimize, Transform OR BECOME IRRELEVANT !!

Financial Investing Radio

When it comes to YOUR BUSINESS...Optimize, Transform, or Become IRRELEVANT!! The technology and business climate have changed; at one point it was more costly to apply AI to Your Business. However, today it is MORE COSTLY to NOT APPLY AI to your business to help you pivot and succeed with your Business.

Hey, this Grant thank you for joining another episode of ClickAI Radio. Okay, so today we're talking about optimizing transforming or becoming irrelevant. I think those are three Critical choices that we have for our businesses. You know, it seems that if we adapt our business to changing conditions, then we tend to maintain our relevance. I've been involved with four startup companies over the years, the first startup company was right out of Chicago, excuse me, right out of college, my wife and I loaded our brand new baby up and moved to Chicago. We were developing solutions for healthcare organizations. We couldn't quite pivot that one fast enough to keep up with need. So very important lesson learned.

Then years later, I got involved with another startup company that I helped develop this one was in Silicon Valley, and the focus there was on providing tools for software engineers. And then the third startup company, again was in the software engineering space. We have offices in Washington, DC and in Denver. And again, we're focusing on project providing solutions for companies that were developing their own technologies. And then in the fourth startup company, again, very similar in the space in terms of it was in the software engineering space. Again, this one is in Silicon Valley, providing tools for large companies. So, of those four, three of them, we, we sold off and that that was a journey in and of itself. But the lesson on each of these was the need to adapt constantly to be ever aware of the changing macro market conditions, other new technologies coming in shifting needs of your customers and the expectations from them. So here I was looking at some examples of companies that did not adapt and these are all ones that you're familiar with right blockbuster we all know the story of blockbuster right ceased operations in 2013. You know, the senior executives as I understand it, understand it were given some opportunities to adopt online streaming, but they ended up deciding against it. But we know what's happened to them now, certainly there's other organizations that aren't around a day like toys r us, right? They see stop operations in April of 2018. One of the challenges they had was they overextended on their properties on the real estate and didn't create new customer experiences. That's that's a no no for us, right. The other hair example is around borders, bookstores. We know they ceased operations quite some time ago back in 2009. But fierce competition from supermarkets, online sales, right, digital books, I mean, can you say Amazon, right?

So the critical news here is optimized transform or certainly become irrelevant. So there are multiple ways as we know to adapt your business right? The focus is to serve your customers to live another day. Right. And one way to do that is through business optimization. And the other is through business transformation. So I want to talk about those and separate those. But what is optimization? When you're going to optimize a business? What does that mean to do that? Here's one potential definition of it. It's when we focus on business performance, right? We want to keep the lights on. Obviously, we're focusing on delivering projects and achieving some repeatability and scalability. So when we have a business model that's operating Well, it's still meeting those customer needs. But we're looking to improve performance and getting efficiencies out of the business. That is an opportunity for optimization. Now, when you think about some of the businesses I'd mentioned a moment ago, all right. Would optimizing their business have saved them? Well, I don't know. Maybe in some cases it might have or might have lengthened out the amount of time perhaps they might have had. But optimization is focused on the current business model that you're working with right and improving efficiencies.

Now, one of the thing is your business might be in the state of needing optimization. And it turns out artificial intelligence can really help with this, right? It can look at the business information that you have in your current business model, and identify patterns and probable future behaviors. Right. So the question is, what is the state of your business? Is this an opportunity for optimization? Are you looking to optimize refund reduction or sales growth or lead identification? If so, AI can help with things like that as well as certainly other areas. All right. So the first question is optimization. It can really help a business become and maintain its relevant, its relevance. Alright, let's talk about the other flavor. And that's transformation. So what does it mean to transform a business. As you know, it typically means to focus on new business capabilities. Now, it may be done within the current business model. So if you're if you have a business, you have an existing business model, but you want to add new business capabilities, they may take the form of new products, right or new services within your current business model. Now, it generally translates into doing some innovative work. So to transform a business means you got to do some innovation, right got to sort of break the chains of how you've been doing things in the past, it might still be in the realm of your current business model. Sometimes though, you're innovating to react to market pressures, right? or other times you're leapfrogging your competition. However, transformation, as you know, can also mean a new business model. So it's a new way to do things.

Now. Let's think about it. What are some companies that you know, that have developed the art and science of transformation right? Let's think about that. Obviously, one that sure comes to everyone's mind is Netflix. They certainly started with shipping DVDs, right? And then then they move to digital streaming. That's a new business model, right? And of course, now today, they produce movies. So this is really an example of what we call vertical integration, right? Where they end up owning everything from top to bottom. They, they not only stream the content, but they actually produce it now. Right? So to vertically integrate your business. That's a big deal, right. So Netflix has been applying AI to help them transform their business model, right, going from GM shipping DVD all the way over to Holy smokes. I'm actually producing the content that I'm shipping to people. Here's some examples, right that they've done this. I found this in one report not too long ago on becoming human.ai. How's that for the name of a website? All right. This is some things that they had identified that Netflix had done with AI to help them transform one of those around personalization of movie recommendations. Now, if you've ever used Netflix, you obviously can see how that affects you, right? Because it starts to see and figure out what it is that you're interested in. Here's another use of AI. It's around the auto generalization and personalization of thumbnails. So when you're actually scrolling through Netflix, it looks at and figures out, this particular thumbnail would be more interesting for grant and therefore have a higher probability that he'll click on this movie. Interesting, right?

Here's another AI use and it's around the location scouting for movie production. Right? You got to figure out Hey, you, you know you're gonna look at costs and expenses and weather, all sorts of things to help them figure out the right locations for producing their movies. And then there's movie editing AI actually gets involved with identifying those hype. Probability times are places where human reviews or involvement should be participating. Now, you know, that's, that can be very costly, right? So you're going to want to be able to take advantage of that. Here's one more I'll mention. And that's of course, around streaming quality. None of us want to have our movie interrupted, heaven forbid, when we're watching something. And so they've got AI that looks at server bandwidth. And if you're a nerd, you're going, you're shaking your head, like oh, yeah, regret In any event, server bandwidth, right? The ability for a server to keep up with the demand that's on it. All right. So that's Netflix, right? Lots of AI for transforming your business. Okay, so so far I've mentioned, look, you can use AI in optimization activities where you're trying to get improvement in efficiencies. Those are very optimization centric, but certainly, hey, things going on with COVID and other competitive pressures. I may have to transform my business and actually take on new new products and services. So AI can certainly participate in helping with that.

Here's another example. McDonald's, they're starting to use AI in their ordering process. Right? So hey, would you like some fries with that? So Mickey D's is actually using AI to try to predict your answer. Now, the impact of that is, is that then they can train, you know, downstream or I should say, upstream look for inventory planning and things like that. So the prediction of would you like fries? And the answer to that certainly impacts their supply chain so they can stock and doing Tori accordingly. They have a new lab called McD tech labs. It's no it's not that new, but it's called McD tech labs anyway, they're applying a lot AI. So whether you're working with hamburgers, or whether you're streaming video, ai gets involved in both optimization, as well as transformation activities of your business. So here's the question. question, what's your objective? Right? First, you have to decide in what manner you are either going to maintain or grow your business. And if you're going to focus on optimizing your business, look at the current processes and apply AI to uncover insights. It takes iteration you can't apply AI one time and make some adjustments and be done. You actually apply it over and over again, because you're changing history and therefore your business information and your data footprint. So you got to do it multiple times over a sustained period of time. If you're going to focus on business transformation, then you know, perhaps it's a new product or service or maybe even a new business model, think Netflix right like going from shipping DVDs to to actual digital streaming, then leverage AI to produce as many insights to the relevance and the value of the target product or service.

So moving forward today, you know in business without applying any is actually a costly decision. There is one point in the growth and maturation of AI. And of course, we have a long ways to go for AI to get obviously even more more useful and more relevant. But nevertheless, there's a point where it was so costly to do AI, it was hard to justify. We've we've tipped that now right now we're working on the democratization of AI, for small to medium business environments. That's my mission to help you do that. And that is actually very cost efficient. So to move forward in your business direction, without including AI, that's actually the more costly thing. So don't do that. What you rather do is you get involved with applying AI to help your decision making and shine the light on all of the secrets that are available to you that are in your business information. Now, it may mean that if you don't do that, then you might end up on the endangered species list writer perhaps become extinct as a business like those three that mentioned before, right blockbuster obviously, didn't pivot, right didn't keep moving forward with it. Hey, I really appreciate your time. Thanks for joining and until next time, pick your business route to apply AI, whether it's optimization or transformation.

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