As a physicist I live my life based on a few “quotes” from people like Newton, Bohr, and Einstein - now known as fundamental laws of physics. As a direct result of my education, I am always on the lookout for similar insights in business and technology. One such recent insight is Marc Andreessen’s quote “Software is eating the world.”
AI “chatter” has become deafening at this point so finding meaningful and instructive bits of knowledge is challenging. Recently, I’ve found it difficult to go anywhere without overhearing someone share their opinion about AI or parroting something they had heard in the media. AI has become the “go-to” topic of the year - far exceeding polite conversation about Newton’s Laws of Motion, Einstein’s Special Theory of Relativity, or even the weather.
So, whether you want to advocate for the use of AI in your organization, impress someone at an ELFA or NEFA event, or just channel your inner Cliff Clavin at the next neighborhood social event, here are my favorite AI insights so far in 2023.
1. “Having better prediction raises the value of judgment. Prediction machines don’t provide judgment. Only humans do because only humans can express the relative rewards from taking different actions.” — Ajay Agrawal, co-author Prediction Machines
Agrawal, Ganz, et.al., authored a seminal work on AI titled Prediction Machines. One their most important insights regarding AI is the statement above for two reasons. First, it tells users of AI that AI agents and other software-defined machines will not help with judgement. Prediction Machines, as defined in their “Anatomy of a Task” shown below, require judgement but they cannot provide it. That means that a human must provide the judgement function after a prediction is made in order to complete the task, i.e., make the decision. Human judgement is the key to successful use of AI.
The second reason is that those who view AI as an existential threat, particularly creatives, do not understand their own value. If all they do is provide ideas that someone else judges for value, then “Yes”, AI will do this better and faster because it produces in microseconds, not hours and days. But without judgement, ideas also have no value other than by accident. Judgement is the central skill of a good creative professional. Van Gogh didn’t ask others if they liked his ideas before he put paint to canvas. Creatives should be figuring out how they can use their good judgement and AI to make themselves, the humans, more productive and more valuable.
2. “Prediction is taking information that you have and turning it into information that you need.” — Josh Ganz, author of Prediction Machines
Insight during any problem-solving exercise is the key to action. Actionable insights sit at the apex of the data-information pyramid. Ganz teaches that prediction, the principal manifestation of AI via prediction machines, combines analysis, probability, and action rolled up into one. This is another AI fundamental, like the recognition of judgement above. The “information you need” is in the context of a future decision or action so it is, by definition, a prediction. The key is figuring out what prediction you need to make a better or more competitive decision and take more effective action. AI provides actional insights when you take the information you need and build a prediction machine that provides navigation to the outcomes you desire.
3. “It turns out that creativity is not that hard. It’s just a lot of hard work.” — Lydia Chilton, Computer Science Professor Columbia Engineering School
The creative community is in hair-on-fire mode due to generative AI. The reality is that generating ideas has always been easy - for both humans and, more recently, machines. You can crowd source almost any creative design problem today, e.g., new logos, taglines, or package designs. Big brands have done this by “shopping” creative work to agencies since the 1950’s. The hard work in creative design is condensing and selecting those ideas that are most effective for impact. Search Google Images for creativity or ideation. You will see what has always been true: the creative process is about choosing,
As in the discussion above, this requires judgement. But when human behavior is involved, particularly human response to new things, trial and error is the go-to methodology. AI is very good at trial and error, that is how it learns. That is how ecommerce and streaming sites expand consumption. But each trial requires a judgement of the response or return and then a decision on which way to go next. Machines typically decide the next direction randomly, but humans can find subtle indicators in the responses to ideas that give direction to the next step. Brute force will almost always find the way, but both the efficiency and consequences of a “random walk” can be unacceptable. Creative professions, again, must embrace the advantages of AI as well as the advantages they have developed from their experience and training.
4. “I get it.” — Michael Schur, member of the Writers Guild of America negotiating committee.
When I heard this statement while listening to a recent Freakonomics podcast - Can AI take a joke? I immediately thought: “No, you don’t get it. Because it is not about your contribution or process of writing entertainment, it’s about the outcome of the writing - the response of the audience.” Fighting the progress of efficiency with technology is like disagreeing with gravity. Futile. Such fights and protests can create a lot of news, but it is futile because others will embrace the opportunity to use AI and they will learn how to use it to get better. That is both human nature and the objective of every business.
If there is any single undeniable truth about AI today it is that no one knows all the ways that it will change human endeavor. Like any technological advance it will certainly change or eliminate some occupations, but it will create more. AI will make the curious, open-minded, and performance motivated more productive.
5. “The only sustainable competitive advantage is an organization's ability to learn faster than the competition.” — Peter Senge (Business strategist and author The Fifth Discipline)
Peter Senge is one of my favorite business strategists because he always took a systems engineering approach to business. This insight regarding competitive advantage in business is on the order of Newton’s F=ma in physics. Like gravity, the speed of learning will always be critical to winning. Every organization must be focused on learning and given AI is intrinsically a learning technology so its use will be a super-power for Senge followers.
Consider the advantage of learning how to predict buyer intent and be the first to present an offer that meets their needs. Consider the advantage of having the probabilities of each 10 possible outcomes from a decision so that the two undesirable ones can be avoided. Trial and error have always been a part of human learning, but learning is much easier when the likelihood consequences is known.
AND ONE MORE: “AI will not destroy the world, and in fact may save it.” — Marc Andreessen (Managing Partner and Co-founder a16z)
Marc Andreessen has been a trusted voice of technology forecasting since founding of one of the first Internet tools (Mosaic) and his warning to business leaders “Software is eating the world.” His AI prognostication leverages and relies on several of the quotes above. I recommend reading his treatise on the matter to calm your nerves regarding the existential impact of AI and hear his insights on how AI will improve many of our life experiences. Andreessen has company in his optimism and the thought leader quotes above teach us how to make Andreesen right.
NOTE: I’d love to hear from you what you’re hearing about AI or your favorite business quotes. Please send me a note at snelson@Tamarack.ai or connect with us on LinkedIn.