In business strategy you’ll often hear a competitive advantage described as a moat, but most moats are more like a long bridge. The moat is the thing that prevents others from easily replicating another business. A long bridge takes a time build and is effectively a moat if it’s impractical to catch up or simply makes it a schlep.
In a sense, generative AI is a bridge shortening technology opening up many businesses to greater competition. Of course, replication does not a business make, but what happens when a motivated group of smart people uses better tools to build a competitive offering in a short-bridge amount of time?
See also:
- The book 7 Powers shows that building large durable business has more to it than building
- Time is still the hardest to replicate advantage since advantages accrue to the leader and incumbants have been the leader for much longer
- Maybe managerial capitalism is the true moat destroying technology?
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There Is No AI Strategy Without a Data Strategy
Startups typically have an advantage over incumbents when it comes to adopting new technology. With artificial intelligence however, incumbents are fast to integrate LLMs and have the data needed to make better AI-powered products. For example, an established CRM platform has the data needed to train, evaluate, and deploy AI products that a startup would not have access to.