2023 in the rear view

2023 is almost over, and it's time to look back at what excitement, innovation or boredom the year brought us. The year was full of stories: endless talk about AI, Google's antitrust court case, Meta's competitor to Twitter, and a slew of new tech products and company developments.

I covered some of the major headlines, but also topics which the media hasn’t found important yet, but are, in my opinion, trends worth watching in the years to come. Without further ado, let's review the top recurrent patterns from 2023 and reflect on how they’ll shape up in the year ahead.

AI’s hype still outweighs its real impact

By most accounts, 2023 has been hailed as the year of AI adoption. The year began with the rolling and roaring arrival of ChatGPT—a trend that has only grown—and concluded with Google releasing the Gemini LLM just a few weeks ago.

The recurrent pattern throughout this year in AI has been what I'd term 'excessive hype' and ‘exuberant optimism’. At the start of the year, with ChatGPT making headlines, I suggested that much of it was overblown, with a limited basis in reality:

“When you first encounter a technology which does something which you haven't seen before. you get enchanted by it. Then you start imaging all the possibilities in what it can do for you. Then the reality settles in and you realize it is still a long way to go before it can be truly useful.”

The AI hype frenzy continued into 2023, especially with Microsoft’s series of "AI-powered" products, which I described in September as Microsoft simply aligning its basic tools with market standards. I mentioned that AI is now little more than a marketing buzzword with ill-conceived attempts to differentiate products in the market, and that seemingly every AI-powered solution promises to revolutionize our lives and free us from mundane tasks.

But it didn’t take long for the “hype” to turn into outright dread. In May, Geoffrey Hinton, the Godfather of AI, quit Google to be able to freely speak about the dangers of AI. But the real danger, in my view, is with humans, not the technology itself:

“What started as an amusement, an interesting research project is quickly becoming a sharp knife in the hands of children. Every time you read about the dangers of AI taking over, remember, it is nonsense. What we should be afraid of is people with no comprehension about the impact of their actions.”

Now, as we conclude the 'year of AI,' what can we say about all the hype (and fear)? Not much, really. The hype and fear around artificial intelligence may linger, but the recurrent pattern that will continue to 2024? Let’s revisit a newsletter from earlier this year:

“AI is just another kind of technology. It’s a tool. Because of the speed at which it can provide outputs faster than ever before, it creates this emotional sensation where we feel there is something magical behind the curtain. There isn't.”

The benefit of this year is renewed focus on innovation and excitement of things to come:

“Out of all this, the best part is that anyone has access to this new, exciting technology and can start experimenting and unleashing their imagination. The land of never-ending possibilities just got bigger. Make it your own recurrent pattern and build something amazing.”

Some business models aren't worth protecting

One of the most persistent trends in the tech industry is the understanding that technology alone seldom guarantees a company's success; often, it hinges on the chosen business model. Business models, typically established early in a company's life and challenging to alter, are not always worth protecting or saving, even if they’re used by established companies.

This year, several headlines have highlighted the pitfalls of flawed business models, underscoring the importance of sound strategy in the technology sector.

In May, we examined a company, not specifically in the tech sector, that serves as a prime example of a great business model. Costco is not making money on selling products, it makes money through memberships. With every new member, Costco can get better prices from its suppliers, which means lower prices for its customers. Better yet, those customers tell all their friends how much they save at Costco and it drives a virtuous cycle. The best part of its strategy - despite monstrosities like Amazon and Walmart - there are no competitors to be found.

In July, the Canadian government passed into law Bill C-18, also known as the Online News Act, which led to discussions around government support for various media and news outlets. But as I argued, it’s unclear whether these outlets have a business model worth protecting in this case.

“For over 20 years, the vast majority of news publications had a chance to change their business model and content delivery. They didn't. Now they want the government to keep them in business. And everyday it will get worse for them because the smarter one will make them obsolete.”

Another major event in the tech world was Google’s antitrust trial. A key moment was the testimony of Microsoft CEO Satya Nadella, who criticized Google’s allegedly unfair practices that have overshadowed others, like Microsoft’s Bing.

As I said in my newsletter that week, Microsoft rarely wins based on building innovative products (including its Google competitor, Bing), rather its trying to win by buying (or killing) the competition. “No amount of money can salvage a product that lacks a clear vision and a concrete strategy to build upon.”

No market = no real product

In 2023, the tech industry introduced a few intriguing solutions. A consistent theme, however, was that even groundbreaking technology falls short without market demand to support it.

In June, Apple revealed its Vision Pro, touted as the dawn of spatial computing. For a mere $3,500, you'll essentially be buying what looks like fancy ski goggles. My perspective was that Apple actually presented an early prototype of technology still searching for a problem to solve:

“Apple is hoping that with its size, industry partnerships and unlimited amount of money it will create another product category where everyone has failed so far. Apple is hoping for a miracle. The company is trying to create a new pattern, where people disconnect from the real world and hopefully find the creativity to enrich their lives. I just don't see it happening.”

Similar to Apple, a new startup called Humane introduced Ai Pin as the new communication device and omnipresent AI assistant to support you in your daily life. My take was:

"I don't know if the Ai Pin will become a recurrent pattern, but it is definitely exciting to see the innovative thinking that made this product happen."

Then there's Threads. Ah, Threads, Meta did make an effort. In the initial days post-launch, Threads’ creators boasted attracting over 70 million users, only to see a staggering 80% drop within the first month. I had expressed cautious optimism in my newsletter about this new social platform:

“Threads is a test to see if Meta can start creating this new universe of social networks where users can freely move around, communicate with each other and, of course, eventually be monetized.”

However, nearly half a year later, Meta's experiment appears to be faltering, while Twitter continues its decline towards obscurity. Both Twitter and Meta are losing users, and for the former, even advertisers are withdrawing. Let’s see if? 2024 will bring some innovation in this space.

I hope your year was also full of excitement and innovation; and you keep it as a recurrent pattern in 2024. See you then.