What Automation Means For Your Business

Written by Matthew Mottola

Is it possible the next billion dollar company could be at the hands of one person? It’s a crazy thought — but according to Gigster CEO Roger Dickey not too far away. According to Dickey:

“Soon, one founder will be able to outsource every aspect of their company and obtain sustained success without a single full-time hire”

The reason is automation. According to a McKinsey report, current technologies could be used to automate 45% of individual activities. From bookkeeping, to invoicing, to higher-order cognitive processing, automation spurred by artificial intelligence has the potential to automate anything repeatable and predictable.

But how much of a value chain is repeatable and predictable? According to Sebastian Thrun in his talk What AI Is & What it Isn’t:

“If I look at my job as a CEO I’d say 90% of my work is repetitive. I don’t enjoy it. I spend about 4 hours a day on stupid email. I’m burning to have something that helps me get rid of this.”

And that’s a CEO. As we move down the chain these numbers are even more alarming. According to the same McKinsey study, only 5% of what we pay people to do requires creativity.

As you’ll see below, this holds massive implications in terms of the new paradigm of business modeling.

The Future of Work will see the automation of anything that is repeatable & predictable

Building Around Automation

What does it mean if one person can outsource every aspect of a company except for one core competency?

According to our research, it means even more power to the entrepreneur. What exactly is an entrepreneur? Someone (or an organization) that can identify, create, and capture value in extreme uncertainty. They do this by accelerating through a feedback loop that from a high level starts with an insight and ends with a product or service in the hands of end users. Due to their lack of overhead, entrepreneurs accelerate significantly faster through this process, thus better identifying & creating value around insights.

Entrepreneurship is the art of accelerating through an insight to execution feedback loop

If an entrepreneur can use technology to automate every aspect of a company, this means quicker cycle times, which means a higher rate of innovations challenging the large and slow incumbents.

What this means is a macro-transition for a company’s competitive advantage away from operational efficiency and toward product leadership.

We can visualize this through the three horizon methodology for innovation.

There’s also a great graph thanks to Baghai, Coley, and White that further explains:

Automation gives entrepreneurs the keys to accelerate horizon 3 technologies, arguably enabling a position of leverage that large companies are locked out of.

There’s one more force that will transform the product development cycle times more than any other current technology. According to Andrew Ng, professor of AI at Stanford University, “AI is the new electricity”. What he means is that AI — the science of programming cognitive abilities into machines — will become accessible to everyone through the cloud as a service. Since this sort of technology is optimal for automating enhancement (horizon 1), incremental iterations will be like turning the light on. Flick — iteration. For business models, this replaces the processes to optimize anything repeatable & predictable. Thus beyond just automation, if we look at Porter’s Value Chain in relation to the mass adoption of AI as a service it’s glaringly evident how flawed a systematic and sequential strategy built off efficiency will be.

Value creation will be in the form of breakthrough innovation

So what can companies do?

Companies need to position themselves as innovation machines — enabling the speed and flexibility of entrepreneurship without the corporate chains. And they need to leverage the rise of automation through artificial intelligence based technology — a subset of digital transformation.

About the Author

Matthew Mottola is a leader in innovation, focused on the convergence of artificial intelligence and the future of work. At Silicon Valley based Gigster, he collaborates with enterprises and early-stage ventures to drive value creation through an interdisciplinary framework of design-thinking, lean/agile methodologies, and innovation/disruption frameworks. At Georgia Tech’s Scheller College of Business he’s a visiting lecturer and helps develop their entrepreneurship curriculum by directly contributing a course-pack, an interactive textbook used as a life-long lean/agile toolkit, and ongoing presentations & workshops on automation & the future of work. He contributes on LinkedIn, speaks, and is the author of University Textbook StartUp Not StartDown. Academically he holds an M.S. from Babson College, U.S. News and World Report’s #1 graduate school for entrepreneurship, a B.S. in finance/accounting, as well as certificates from Harvard Law School for Negotiation Leadership and Tongji University (Shanghai) for international business.