Technology Innovation and Business: AI, GPT, and The Innovator’s Dilemma
Marty Shagrin, Chief Financial Officer at Futuri
As the CFO at Futuri, I have the privilege of helping to shape our company to be the most powerful and important strategic technology partner to media companies. Our team takes joy in creating raving fans on a daily basis, and it’s a big part of our best-in-class culture and environment for all of our people to thrive.
We are constantly monitoring and proactively planning strategies to address the technology trends that are impacting our clients today and how they will evolve into the future. This foundation of product innovation is critical to our success, as so many of our partners, view us as an extension of their own teams and look to us to provide critical technology solutions to drive their business.
Last week, we launched our latest solution to help media companies and content creators grow their content, audience, and revenue — the North Star of what we do. the world’s first 100% AI-powered radio host. We know that broadcast’s secret sauce has always been about providing the audience with engaging local content that brings people together within their community every single day. With RadioGPT™, every radio and tv station in the world can provide local content in real-time using AI-generated hosts and scripts powered by TopicPulse, our content discovery system that uses AI to give insights into the most engaging stories in local markets. Now, every show or shift can be local and live.
Futuri was founded almost 15 years ago on the premise “what if radio and TV were created after the internet? How would they be different?” The advancement in AI technologies has helped us take yet another step forward on this journey.
We’ve always been excited to bring innovative solutions to our partners to help them engage their audience and grow revenue. With the launch of RadioGPT™, we were met with more questions than usual. Questions such as, “Is this really going to be good? Will consumers like it? What does it say about the future of radio and tv? Can a bot really be cool?”
At Futuri we have the mindset that innovation will never slow down; the most important thing is how you embrace that innovation. Still, the questions we received out of the gate had me reflecting on my twenty-plus years of being involved with the Technology and Media industry. In my prior life, pre-Futuri, I was a research analyst and portfolio manager for an investment management firm. Every day I woke up focused on understanding how technology trends and evolution would create winners and losers across the tech and media industries. Most of my work involved public investing, and thus, the principles of the book The Innovator’s Dilemma: When New Technologies Cause Great Firms to Fail was a constant component of my analysis. I was frequently analyzing and making investment decisions on large companies with big legacy businesses and profit pools to protect. The concepts from The Innovator’s Dilemma were on my mind nearly everyday.
The Innovator’s Dilemma is the name for a concept that has become increasingly relevant in today’s rapidly changing business world. The concept was first introduced by Clayton Christensen, a Harvard Business School professor, in his aforementioned 1997 book. The book describes the challenges faced by established companies in the face of disruptive technological innovations.
According to Christensen, companies face a dilemma when it comes to innovation. On one hand, they need to continue improving and advancing their current products and services to stay competitive. On the other hand, they need to be open to new technologies that may disrupt their current business model. This creates a dilemma because companies that focus too much on improving their existing products may miss out on new opportunities, while companies that focus too much on new technologies may neglect their core business. The Innovator’s Dilemma highlights the fact that disruptive technologies are often not initially embraced by established companies as they are conflicted by how new innovations will impact their existing business.
There are many to examine but a few of the greatest examples from my time as an analyst include:
Blockbuster (one of the most famous examples) was once the dominant player in the video rental industry. There was a Blockbuster on every corner and it was embedded in the way consumers viewed theatrical content in their homes. However, the rise of online streaming disrupted the industry, and Blockbuster was slow to adapt. The trends were becoming clear, but the company had a huge portfolio of stores and rental revenue to protect. Meanwhile, Netflix, which initially started as a DVD rental-by-mail service, recognized the potential of online streaming and began to focus on this technology. Famously, Blockbuster had a chance to acquire Netflix but it chose to stay its own course and effectively ignore the new streaming trend. Consumers loved the streaming innovation and Blockbuster’s legacy profit pool was under attack. As a result, Blockbuster filed for bankruptcy in 2010, while Netflix became one of the largest media companies in the world. Its current market cap remains well over $100 billion today.
Nokia was once the dominant player in the mobile phone industry, well before the rise of smartphones disrupted the industry. It had over 40% of the industry market share at its peak in 2007. It was a true mobile innovator and a force in the industry. Nokia was the clear leader in mobile technology and brought mobile phones — think brick and flip phones — to the masses throughout the world. Despite recognizing the potential of smartphones, Nokia was hesitant to truly shift towards the new technology, as it saw it as a threat to its existing business model. We know what came next. Apple launched the iPhone, and Google accelerated the distribution of the Android Operating System to support its own mobile search efforts. As a result, Nokia lost its position as the market leader in the mobile phone industry. By the time it realized it was too late, Nokia had lost its way. It was eventually acquired by Microsoft for a small fraction of its peak market value.
There can be great outcomes as well for those that take a different path. Industry stalwarts Apple and Microsoft have had their own bouts with innovation and relevance. There was a time that Apple traded for nearly the cash on its balance sheet as it struggled with lost market share to Microsoft and the PC ecosystem. Then, behind the leadership of its iconic CEO Steve Jobs, it famously launched the iPod and re-established its position as a consumer phenomenon. Next up? The launch of the iPhone… The rest is history. Today it seems like a logical choice to let the iPhone compete with iPods or the iPad to compete with Macs, but that decision was not always so obvious. Apple chose wisely and today is one of the most valuable technology companies on the planet.
Likewise, Microsoft’s dominant Windows and Office franchise, after a meteoric rise, came under pressure as consumers moved away from desktop computing and embraced the internet. While the world was moving online, Microsoft was stuck focused solely on the Windows OS upgrade cycle. It was not until Satya Nadella, who succeeded Steve Ballmer in 2014, came aboard as CEO and embraced the cloud that the company’s growth and market value accelerated higher once again.
Finally, the story of Adobe. At Futuri, as a growing provider of SaaS solutions, Adobe is one of the companies that we aspire to be like. However, this was not always the case. In the early days of the smartphone revolution, Adobe’s Flash technology was used for displaying multimedia content on websites, but didn’t really play well with smartphones. Steve Jobs and Apple publicly threatened to disrupt Adobe by not supporting Flash on Apple’s iOS devices. Jobs argued that Flash was unreliable, insecure, a battery hog, and that HTML5 was the future of web standards. Apple’s decision not to support Flash meant that users of iOS devices could not access Flash-based content on websites, which was a significant limitation given the popularity of iOS devices. Given Apple’s stance, many industry analysts were calling for the end of Adobe.
However, 10 years later, Adobe is stronger than ever. It correctly recognized the growing importance of cloud computing and shifted its focus from traditional software to cloud-based services and solutions. The company eventually developed a suite of cloud-based applications that includes popular products like Photoshop, Illustrator, and InDesign. This shift, not without its risk at the time, allowed Adobe to move away from the traditional model of selling software licenses and instead offer subscription-based access to its products, providing more flexibility and convenience to its customers. Today, Adobe is worth close to $150 billion and is one of the most respected software companies in the world.
There are many other examples of companies embracing technology innovation, including global icons such as Nike, Amazon, and Visa. There are others where the success of the past gets in the way. Nobody is immune. Even today, some of the most important companies must manage through innovation and new trends. Google is already facing its own bout of The Innovator’s Dilemma as ChatGPT and AI will force it to respond and evolve. Search, one of the greatest businesses of all time, now must find its path to evolution and make large language model AI work for it. Google has clearly always proven itself when questioned in the market, but consumer action is speaking and even Google, regardless of its dominance, must now also evolve.
I could go on and on. However, the point is clear. Technology innovation will not stop for anyone. It is coming, and consumers of technology — including executives who make decisions on the technology they use to operate their businesses — will forever look for ways to accomplish their greatest needs and wants using the most advanced, accessible, and easiest-to-use methods available to them.
At Futuri, we have built our company on this premise. We embrace technology and are always looking one step ahead. We have embraced solutions that are important to our partners including essential solutions that engage audience and drive revenue.
We know trying to protect the past is futile. The evidence is clear: history has spoken. We are excited to be there for our partners on this journey and we will continue to push the envelope to make these technologies easy to use — and, more importantly, drivers of media companies’ and content creators’ content, audience, and revenue.
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