A Transformation As Big As - Silent to Talking Movies

"Change has a considerable psychological impact on the human mind. To the fearful, it is threatening because it means that things may get worse. To the hopeful, it is encouraging because things may get better. To the confident, it is inspiring because the challenge exists to make things better." - King Whitney Jr.

This week, note the washing machine and how businesses are into AI-Washing companies claiming to be AI capable, but they are not! The washing machine also reflects the challenge consumers face with obsolescence. It costs us a lot to repair and replace it by design, not to forget the environmental impact. The markets are all about AI, INterest rates, and jobs. If you're interested in starting your own AI business, it turns out you don't need any technology experience. Politicians and the Media are no longer friendly, so who can we trust? And lastly, we are in a shift that is equal to moving from silent movies to talkies.

The Economy and Consumers

The US markets are up over 30% year over year, and the Canadian TSX is up about 26%. However, this market is heavy on technology and recovery from high interest rates and inflation. What does the future look like? I make no predictions about stocks. However, we have entered a new era of consumerism. And yes, it is about AI. Human collaboration and communication with AI will drive this new consumer economy. It will enhance our ability to compete. Consumers will enter a new era of personalization and, in effect, change how consumer-facing businesses will have to deal with their customers.

As we progressively move out from under high interest rates and inflation, we should expect technology investments in infrastructure to grow faster. Organizations will have no choice. They need to compete at a whole new level, a serious challenge for many still trying to keep up with the digital world.

Economic Obsolescence: Nothing Is Built To Last By Design

Last week, our under-the-counter two-drawer refrigerator went on the blink. If we built things to last, it is most likely that replacement of appliances and even computers would not be required so frequently. Our economy is dependent on equipment failures and consumer vanity. All machines have wear and tear and suffer from abuse or negligence by their owners. If these appliances were a live pet, we may be in trouble. However, replacing this two-drawer refrigerator, a major brand name, will now cost over $5,000. We called the repair service, and the expert turned up very knowledgeable and told us that it was the circuit board, but the manufacturer stopped making it about five years after we bought it. He further lamented how frustrating it is for him and his customers. In the EU, he says manufacturers have to keep parts available for TWENTY YEARS from the manufacturing date. In Canada and the US, not so much; it may be 3-5 years. This talkative fellow tells me (I am the wrong person to be feeding this information to) that two to three conglomerates are swallowing up many home appliance manufacturers.

Full Stop! Is there no one following up with what could be shaping to be another oligopoly?

Whirlpool, Electrolux, GE, Samsung, and LG are the top five manufacturers. Whirlpool, for example, owns the brands Jenn-Air, Maytag, Amana, Roper, and KitchenAid. Don't misunderstand me; I have no problem with mergers and acquisitions. But when the consumer is at the mercy of a few sellers, my radar goes off. The fewer competitors there are, the less likely consumers will have advantages in warranties, prices, and choices. Canadian and US regulations need to be similar to those in the EU. It's about consumer protection; no one is trying to quell competition. If we are serious about the environment, making things that will become obsolete because they are not repairable forces consumers to buy more. It seems like an unfair business practice when the same manufacturers must keep parts available for twenty years in the EU.

Now, back to the repair guy. My wife asks which brands are more reliable. To be clear, our brand is high-end if you haven't figured that out with the price. He shakes his head and says, "To be honest, a product at a quarter or half the cost could last you just as long. Right. All of this is also damaging to retailers who sell these appliances. I am sure they get many calls about appliance failure.

One of three things could happen. 1. This needs political leadership, of which I have low expectations. 2. Manufacturers can lead this instead and do what's right for consumers. That would surprise me! 3. Consumers can buy the lowest-priced appliance instead and take a vacation with the money they save.

As for me, a search on the internet showed me two options: one from China, a brand I have never heard of, for $1,069, and the other from a known brand for $2,199. The higher-end manufacturer lost a sale because the parts would be available if I lived in the EU.

AI-Washing: what is it and why it's a problem

In March of this year, the Securities and Exchange Commission (SEC) charged two investment companies with making false statements about their use of AI. It turns out they weren't.

It doesn't end there. The SEC has been investigating companies that may misrepresent their AI capabilities. Some companies, like Coca-Cola and Amazon, have also experienced backlash for AI-washing. The following DW article explains more.

So, what is happening? Companies, publicly traded and private, are worried about being labeled as non-Ai forward-looking organizations. Now, they may be using data analytic tools, but for many, they are an Excel spreadsheet with an algorithm that crunches data ( I am oversimplifying), but this is not Machine Learning with mounds of data sets that have been sanitized and set to be used for predictive insights. And it is very capital-intensive to get there; you need powerful computers (GPUs), data storage solutions, and advanced software that can handle complex AI processes. Plus, the talent and R&D, so as not to be left out, companies are making extraordinary claims. This behavior can hurt company performance, cost jobs, and even business failure.

What happens next? Investors and analysts, all of us, will conduct far more diligence on who is really investing in revolutionary AI. As mentioned in a newsletter a couple of weeks ago, NVIDIA is my barometer on capital investments. If companies are not investing in infrastructure, they are not using Machine Learning AI.

Join The AI Start-Ups: Make B$$$...no experience required

I am kidding about making billions in starting your own AI business. However, I am not joking about the fact that no or little experience is required. I've heard of many who have started their own AI services. So, while writing my new book "Predictive Leadership," I dug into understanding how this was done. Instead of a lengthy explanation, I created this video for a simple explainer. Ostensibly, just about anyone can do it, and as I reviewed many of these services, I had a dot-com flashback as I am already seeing some trying to get high valuations for businesses with no proprietary foundation of their own. However, don't confuse this with sophisticated AI being implemented in companies. It's not the same thing. This is just someone using the technology available, API (Application Programming Interfaces) and No Code/Low Code API tools, from places like, 谷歌 OpenAI , Zapier and Tableau as a short sample of resources, to start their businesses. There will be many more, and quite a few will have question marks about their purpose and intent. In the 1880s, during that industrial revolution, we saw the rise of carpet baggers who were opportunists and gave legitimate businesses a bad name; a little of that is about to happen here as well. Click on the image to watch the video.

Politics - Media In Hot Water

Media: Why do politicians insist on ignoring the mainstream media? How hard could it be to answer a question with a straight answer without attacking the media agency as fake or paid-for news and turning against the reporters who sometimes are later directly threatened by those with extreme views? It is dumbfounding or just plain stupid. I understand why politicians defer and don't answer the policy questions and turn to attacking the reporter. They either don't have a policy or fully intend to eliminate some programs alienating a potential part of their base. However, these very same politicians and parties will face the media once elected, and on that day, they will either play fair or the media will tell us we have voted for a dictator, not a democracy. And if you don't believe them, I guess what's left is alternative news written by people who like anarchy.

What Industry 5.0 Means To Retailers and Other Industries

This transformation will be like moving from silent movies to talkies. Yes, we will be talking to supercomputers.

The analogy of moving from silent movies to talkies reflects how we will transform from not communicating with computers and their software to communicating with them. It is without question an important shift that is going to impact all of us. Never has there been a time when you could clone your voice or your face, create, analyze, write, predict, and innovate as fast as this, and the more we use it, the better it gets. Even if we don't see another evolution of AI for another fifty years, this is enough to change everything. In the world of retailing, all businesses and industries and competition will face a significant shift because of AI; it will transform business and perhaps leave us only with large conglomerates, which is a risk. For a business to start and survive, it must have a powerful and unique value proposition with continuous innovation. You will not be able to reach customers without access to their AI Assistants/Agents. This may give them more privacy and security than anything else we have created. This is the beginning of Industry 5.0.

"The only human institution which rejects progress is the cemetery." - Harold Wilson

Thank you for reading this week's issue of The Business Brief

My new book, Predictive Leadership - How Humans And AI Will Transform Organizations, Innovation, and Competition, will be out later this fall. For corporate and public speaking engagements, you can contact me at [email protected]