...by Daniel Szego
quote
"Simplicity is the ultimate sophistication."
Leonardo da Vinci

Friday, April 7, 2017

Machine assisted business models

Similarly to machine assisted human intelligence, there can be a brainstorming about machine assisted business models, especially if we regard the current trends and improvements of the machine intelligence and communications technologies. In broader sense machine assisted business model that would not exist without some core IT or communication technologies. As a classical name, we usually call these companies as born on the web. Perhaps it is better to focus however on the business models, so perhaps the most exciting cases are companies that business model is based on some core communication technologies but the product or service that the company offers is independent from this technology. 

From a smaller perspective, machine assisted business models are companies where the core business model is based on machine intelligence. It is again more interesting if we speak really about the business model or the value chain and not about the product or the service of a company. Perhaps one example might be financial institutes that are having robo-advisor services as well. In these examples part of the value chain, that is customer interaction, service is based on machine intelligence. A little bit less machine intelligence example is The DAO, where general company management was considered to be replaces by smart-contracts and Blockchain analytics systems. 

There might be a general consideration based on the value-chain model from Porter which activity of a company can be supported by machine intelligence. If we consider general reporting and big-data as well as part of AI then we have already a lot of needs on the management level for such a technologies, however they are not necessarily part of the business model itself. I think we should clearly distinguish the two directions "supported by machine intelligence" versus "based on machine intelligence" and we should consider our efforts to the second one.  
Figure 1. Porter's value chain model.

As Porter's value chain model might be a good starting point for the analysis however it is based on the old-fashioned model of a company. It is an exciting question if the old model can be disrupted considering the new technologies and if we can imagine companies that work somehow absolutely differently. As an example let we imagine something as a fully autonomous cash-flow system that works absolutely without any human involvement. I would certainly consider that as a company though it would be pretty difficult to put into the value chain model from Porter.