Will AI Disrupt Your Industry? (Here's How to Tell)

Is an artificial intelligence disruption on the horizon for your industry? It's a question keeping many executives up at night.

AI companies are rolling out new tech at such a fast clip it can be hard to keep up. As I noted in my recent look at how FinTech is being transformed by these developments, innovation can impact an industry from multiple directions.

With this kind of change on the horizon, business leaders can't afford to turn a blind eye to where their field is going. Fortunately, it's possible to get a grasp on what this will mean to you. By applying Clayton Christensen's 3 types of innovation framework, it's possible to gauge how AI might reshape your competitive landscape. Let's explore what this means by looking at each type of innovation in turn:

1. Sustaining Innovation:?? AI can significantly enhance existing products or services, offering sustaining innovation (i.e. performance improvements) for market leaders. If your company is already at the forefront of its industry, integrating AI could be the key to solidifying that lead. This would likely translate into using AI to deliver superior performance to your most demanding customers.
2. Low-End Disruption:?? For industries with high cost structures, AI presents a ripe opportunity for low-end disruption (i.e. offering services at discounted prices to the low-end of the market). New players could leverage AI to offer "good enough" solutions at a fraction of the cost of incumbents, who face a different cost structure and typically have no choice but to retreat up market to higher margin use cases.
3. New-Market Disruption:?? AI has the potential to create entirely new markets by making goods and services available to customers who historically lacked the money or skill to buy from incumbents. Look for signs where AI is making products simpler and more accessible, thereby tapping into a previously untapped customer base.

As a business owner or executive, it's crucial to identify where your industry sits within this framework. Are you poised to lead with AI, or will you need to defend against it?

The time to analyze your industry and your firm’s strategic position is now. Stay ahead of this wave of innovation by being proactive, and strive to get a sense of what could happen in your field over the months ahead.

Stay tuned for the next piece in our series on technological disruption, where we'll explore how leaders can pivot their organizations to harness the power of AI. ??

Eric M. Jackson is a technology executive & strategy consultant. As part of Peter Thiel's early-PayPal team, he oversaw the implementation of PayPal's revenue model, and in the years since has created and advised multiple technology businesses. A sought-after speaker and award-winning author of The PayPal Wars, Jackson lives in Los Angeles with his wife and two daughters.

Jeff Parker Ashley Bradford Aman Verjee, CFA Ken Miller Premal Shah Reid Hoffman Yee Lee Katherine Woo John Combs Patrick Breitenbach Peter Ashley Tim Wenzel Bob McGrew Brian Shin Dave McClure Brent Bellm Vivien Go Rod Martin Seth Avergon Alexa Fleur Mark Fields Davidson Victor Dominguez Metta World Peace Sam Kamel Jor Law Andy Wilson Jim Jonassen Roy Ng Brian Solis Mark MacLeod Damon D'Amore Annemarie Penny Carl LaBarbera Joel Lueb David Carter David Travers Mark Jeffrey Stacey Kim-Jackson