In the booming post World War US economy of the 1950s, the American companies like RCA and Zenith made a ton of money selling music consoles – elegant cabinets with integrated radios. It was part of the middle class living rooms. High quality wood and high quality radio.
Sony, a small company back then, licensed the patented transistor technology from AT&T and made small, portable radios. It didn’t compete on quality. It made transistor radios accessible to teenagers for the first time. The product provided Sony with a foothold in the American market from where it could gain market share.
The book Innovator’s dilemma describes this as follows.
The incumbent is focused on existing customers and providing high value products. New companies serve low-value customers with poorly developed technology. There is a lot of trial and error before the technology matures. The innovator’s dilemma is to identify which innovation is going to take off and compete with them.
What does this have to do with ChatGPT?
Google search is the incumbent player. People all over the world rely on it to provide relevant, accurate answers to their questions. Accuracy and relevance are the premium features here, much like the sound quality and wood quality were in the music consoles.
Chatbots based on generative AI are the next wave of innovation. The technology is still in early stages and we have already seen two very famous and public failures
- Microsoft Tay, launched in 2016, started spitting out racist, misogynist slurs within 24 hours of its launch
- Facebook Galactica, launched in 2022, was shut down within 3 days after embarrassingly inaccurate results
It is dangerous for a dominant player like Google to risk putting something out there without sufficient safeguards around accuracy and relevance. ChatGPT seems to have avoided that embarrassment so far and Google’s dilemma is if the technology is sufficiently advanced. By most accounts it will likely launch its own response soon.
The book Crossing the Chasm is the more relevant one for me here. There is a chasm, a gap between the early adopters and the rest. The early adopters (the ChatGPT users) want something new but the rest want something that is proven.
A company that successfully crossed the chasm is Apple. Apple was not the first one to launch the watch or the headphones. But when they were finally launched, the technology had matured and they matched our expectations of a premium quality product.
Google is now where Apple was around 15 years ago. I don’t worry that it did not out-innovate a newbie. I hope that it delivers its promise on accuracy and relevance when it does.
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