Artificial intelligence boom

It’s been almost a year since my last post. Typical.

During the past year I have become very excited about artificial intelligence. I have both read a ton of articles about it and had the opportunity to meet and interview the best minds in Finland on the topic. It has been a ride.

It took me a while to understand the magnitude of the change AI is going to make in all of our lives. I had heard the big predictions before, but when someone is telling all jobs will be forfeit, you very soon lose interest if there is nothing concrete behind these accusations. It takes time and effort to understand what is going on.

The key to understanding AI and its implications  is in fact time. If we look far enough to the past, we can see the big changes in human history. A hundred years ago 70% of the population was farming and nobody went to the gym. Now about 2 % of workforce gets their bread from agriculture (pun intended) and 70 % of people go to the gym (I have no evidence of the gym-going percentages, but it sounds cool and the point is more important  than exact figures). Yet the 68 % of people are not unemployed. The industrial revolution happened gradually and everyone found new occupations. In time.

We are approaching similar kind of disruptive age (now I’m preaching doom). This time the change will happen much faster, which will cause more trouble to people, but eventually everything will get better. Following the industrial revolution, there is one important thing to understand, however. The machines are not stealing our jobs. They are merely helping us with routine jobs that machines are better at. We, the people, will have to learn new skills to work with the AI-operated systems and at the same time find new things to do. Starting a gym for example.

So, instead of being afraid of super-intelligence, self-driving cars or robots, be curious and think of all the dull things in your own job. Those are the first ones to be thrown to the AI-lions and we need to help that happen sooner rather than later.

My sources of news and information

In the past all you needed was a daily subscription of your local newspaper and you got all the information you needed every morning to your coffee table. Many people still follow that routine, but we live in a much bigger and more open world nowadays and no single news outlet can cover all the needs for information. Not for me anyway. So, how do I keep up with the things I want to follow. This is how.

  1. Facebook

Facebook is still the first place I go in the morning to see what’s going on. There in the same stream are the latest things from my friends, but also a great variety of very different kinds of news from all over the world. I happen to have a very heterogeneous and quite large social network that shares all kinds of interesting things. I have a feeling that the importance of Facebook is in the decline for me , though, as it is with many of my friends

  1. Helsingin Sanomat on iPad

I am a subscriber of Helsingin Sanomat, the largest and best newspaper in Finland. I get it on my iPad anywhere I want and I get both an overview of what’s happening in Finland and especially on weekends, very interesting deep insights into topical themes. The latter is even more interesting to me than the news.

  1. The daily tech news show –podcast

As confessed in my earlier blog (in Finnish), I am a patreon to the DTNS-podcast. I listen to it every weekday and get, in my opinion, the best overview and discussion of the technology related news in the World. For issues I get more excited I can go to the DTNS shownotes and find related links to dig deeper into the topic as I have many times done.

  1. Giga OM’s seven things to read this weekend –email

Giga OM, a well-known tech journalist and a VC began a short while ago a mailing list to which he sends seven links that he found most interesting in the past week. I have found so many pearls in these emails that I eagerly wait for the email every Saturday. The articles are often long and the topics such that I would never have read them if they were not on the list.

So, for me it is a mix of social media, traditional media on digital platform, a podcast and a mailing list. Everyone have their own need for information and sources for it.

How The Presidential Candidates Spy On Their Supporters | Indicative

Simple, Powerful Business Intelligence & Analytics For Marketing, Product, and Business Teams.

Source: How The Presidential Candidates Spy On Their Supporters | Indicative

Everyone and their cousin is talking about the importance of big data. But what does it really mean? The ongoing presidential election in the US gives us an unique viewpoint into how big data is used in large scale and with nearly endless budget. I found this story while listening to this episode of The Daily Tech News podcast, which I highly recommend. The linked article gives an in-depth analysis on how the candidates are using technology and which tools are been utilized.

The candidates or their crew follow visitors in their website and buy data from the likes of Facebook and Google to find their supporters and to contact them. In addition to just finding them, they know in advance which topics the supporters might be interested in. So, for example, when calling a potential supporters they can start talking about religious freedom to one person and emphasize the importance of keeping Trump out of Washington to other. All these tools can and are used in retargeting advertising as well, but the presidential election is a very interesting series of events with limited choices so this can be followed more clearly. Grab your popcorn and tune in!

New solutions to logistics, please!

I recently bought a Moov Now activity tracking bracelet from their US-website. I will come back to that in later posts. Shipping costs were free and the device was promised to be delivered in 7-14 days from their UK-based warehouse. I received a tracking url and everything was great. Until the time for delivery came. I went home yesterday and found a slip of paper from Postnord indicating a failed delivery attempt. It advised to go to their website and suggest a new delivery time. Unfortunately the url in the slip did not work at all and after googling the company I found out that the web service did not function. I had to call to the customer service number in which a machine told me that queuing costs for me. In the end I waited for 20 minutes and agreed to pick up the packet myself the next morning. As I complained about the service on Facebook, quite a few of my friends shared similar experiences with courier companies.

The rant ends here, because this blog is about positive things and not for complaining.

I see here a great opportunity. Online buying increases very fast and in my opinion the last thing holding it back is the delivery. As the prices are cheaper in online stores than in regular ones for obvious reasons, I would be willing to pay a little for the delivery if it would be fast and trustworthy. In many online stores abroad the delivery is free, but the service one gets is random. If I would only have a mobile app that accurately would tell me when my valuable parcel comes within 50 kilometer radius of me and I could define the best suited delivery address, world would be perfect. Please, real hackers. Create the app, contact me and we’ll make millions with it together :).

Digital business models in construction industry

I was interviewed by Aarni Heiskanen for the AEC podcast on the topic of digital business models in the construction industry. Admitting that I know very little about construction, thinking about the business models and changes they may cause in the industry was quite fascinating.

I see business models as a construct of four elements: value proposition, processes, resources and revenue model. Writing a dissertation on business model experimentation I am very well aware that there are multiple interpretations of the concept, the most well known being Alex Osterwalder’s business model canvas with nine elements in it. Other researchers have different definitions, however, and here’s the academic reasoning behind my definition:

The business model has been defined to consist of three core components, resources and components, organizational structure, and propositions for value delivery (Demil & Lecocq 2010); or four elements: a customer value proposition, a profit formula, key resources and key processes (Casadesus-Masanell & Ricart 2011); and four interlocking dimensions: customer value proposition, the profit formula, key resources and key processes (Johnson, Christensen and Kagermann 2008). The business model answers to the following questions: who is the customer, what does the customer value, how do we make money in this business, and what is the underlying economic logic that explains how we can deliver value to customers at an appropriate cost (Magretta 2002). McGrath (2010) sees the business model building up from two components: basic “unit of business” that customers pay for and process or operational advantages that yield performance benefits. The description of the mechanisms enabling it to create value through the value proposition made to clients, its value architecture and to harness this value in order to transform it into profits and profit equation (Moigneon & Lehmann-Ortega 2010). Also the content, structure and governance of transactions designed so as to create value through the exploitation of business opportunities. Amit & Zott (2001) and Zott & Amit (2010) describe business model as a system of interdependent activities that transcends the focal firm and spans its boundaries. Business model development includes the following elements: customer value proposition; target market segment; revenue model; partners’ network; key resources; key assets; cost structure; and estimation of profit potential (Dmitriev et al. 2014).

Looking at the four elements of business model and thinking about the possible changes digitalization may have on construction industry is intriguing. The industry is very concrete and the product delivery must happen locally. Everyone has to live somewhere and the construction of houses has to happen in areas people want to live in. People also need services close to their homes and places to work in. Looking at the longer perspective I see the need for new constructing decline, however. The need for shopping malls and brick & mortar stores is falling as the internet is fulfilling our needs more efficiently. Also, the paradigm of ownership is changing and people give more value to using goods than to owning them. This can change the need for owning your house, summer cottage or other buildings too, which will provide opportunities for new revenue model innovations for some companies. Airbnb is the obvious game changer in the hospitality industry increasing the usage of people’s homes and decreasing the need for hotels. The processes will definitely get more efficient with digitalization as well as the distribution of resources.

Even if everything mentioned above indicates toughening competition, there are new opportunities coming with digital business models as well. My understanding is that here in Finland we are very good in construction engineering and design related issues. Digital business models transfer the value from the manual construction work upward to construction and engineering expertise. With digital tools this expertise suddenly has much bigger market as the need for local presence diminishes. If one can design and think of all possible aspects of constructing a building in frozen Finland, how hard can it be to replicate that in any other place on the planet? 3D printing is one interesting new technology possibly providing even wilder perspectives to this, but I don’t have enough knowledge to talk about that further.

As a conclusion, I see the business models in construction industry changing sooner rather than later. All companies planning to thrive should be ready to experiment with their business model and try out new ways of doing things. The changes don’t have to be radical, but there needs to be enough agility in companies that allow them to react when the change is needed. I see the value of manual construction work declining and the value of engineering, design and architecture expertise increasing. This provides great opportunities for those that can capitalize on them. The disruption is not imminent yet, but the changes are coming. Stay firm, stay agile.

Streaming businesses have been accepted

According to a recent post by Sarah Perez in Techcrunch, Nielsen’s data indicates that music streaming has been in rapid growth in 2015. Due to new players in the industry, improvement of connectivity and increased user acceptance, the on-demand streaming services grew from 164,5 billion songs in 2014 to 317 billion streams in 2016. This has resulted in digital music and album sales decrease on all fronts except vinyl, which has been increasing for ten years now. Retro sells. Another interesting fact from the article was also that new music is predominantly discovered from radio and its importance is increasing. In a way, we are going back in time with this too.

Music business has been the first content industry that faced the challenges free content distribution in the internet has made possible. They did all the possible mistakes in the early days, but have also been first to be able to create radical changes that have created the base for new business.

Looking at the big picture it is easy to declare that companies need to find ways to take advantage of disruptive technologies at the exact right moment. First movers are often in trouble, but if you are late, your business will not recover. Increasing popularity of streaming can be seen in other industries as well. movie and television business is a no-brainer, but the big trend of renting rather than buying is the same phenomena. The popularity of “streaming” a car, house or book is rising – and not only downloading, but uploading as well. Or how would you call Über, Airbnb or Campusbookrentals?

Big industry disruptions take ten years, give or take, to go through. Winners of these changes are active in trying to understand the changes as early as possible and first in experimenting with new ways of doing business. The time of long lasting competitive advantage is gone and all companies must build ways to adjust their business with the changes in the industry.

Hello World!

We are all living in the future. At least if we trust Wait but Why, and why shouldn’t we? Last year we finally reached the day Marty McFly travelled to in the movie Back in the Future and mainly because of that we have seen a dozen or so different hoverboards presented to us in the past months. Self-driving electric cars do not surprise anymore and there are people with serious plans of colonizing Mars.

If we look at the business side of things I also see the future all around us. For me this means that the old rules don’t apply anymore. The internet has matured and slowly but surely changed almost all industries and businesses. I have written about the doomsday of businesses in different forums for a few years now. I feel that this whining must end and I must offer answers rather than questions. In the coming posts I am trying to provide those and hopefully I can attract some posts from my colleagues, friends and other people wiser than myself.