The content for this blog comes from my recent TedX talk: Building an AI-Grounded Company that was held in Perth, Western Australia November 2024.
Introduction
In today’s rapidly evolving tech landscape, AI is no longer a luxury but a necessity for any business aiming to stay competitive and relevant. Some companies have thrived by embracing technological innovation from the start, while others have missed out and paid the price. Let's dive into two contrasting examples: Blockbuster and Grammarly, that illustrate the importance of innovation and adopting AI-driven strategies to future-proof your business.
Blockbuster’s Fall: A Cautionary Tale
At its peak, Blockbuster was a household name, a giant in video rentals with nearly 9,000 stores worldwide. But as digital streaming emerged, Blockbuster clung to its traditional business model, refusing to adopt new technologies that could have transformed its future. Rather than embracing emerging tech like AI-driven customer insights or exploring online streaming, Blockbuster continued to rely on physical stores and rental fees.
Figure 1: The fall of Blockbuster
The result? Blockbuster filed for bankruptcy in 2010, while its rival Netflix, initially just a mail-in DVD rental service, embraced streaming and grew into a global powerhouse. Today, Netflix stands as one of the most valuable entertainment companies in the world. Blockbuster’s downfall illustrates the danger of ignoring tech innovations like AI, especially as industries are rapidly reshaped by new technologies.
Grammarly’s Rise: A Case Study in Embracing AI
Figure 2: Grammarly's AI supercharged team
In stark contrast, Grammarly is a shining example of how embracing AI early can supercharge growth and transform a business. Launched in 2009, Grammarly started as a simple grammar checker but quickly recognized the transformative potential of AI. By integrating machine learning and natural language processing, Grammarly evolved from a helpful tool to an indispensable writing assistant that not only corrects grammar but also enhances tone, clarity, and engagement. Starting with a valuation of around $1 billion in 2017, Grammarly has grown exponentially, now worth over $13 billion. Grammarly’s success shows that businesses that proactively embrace AI can scale quickly and continuously improve their products, setting themselves apart from competitors.
The Risks of Not Adopting AI
Blockbuster’s story is far from unique. Legacy companies across industries are at risk of being displaced by younger, tech-savvy competitors who leverage AI and automation. Here are some of the major risks companies face by not adopting AI:
- Loss of Market Relevance: Competitors using AI can adapt faster to market changes and customer preferences, leaving slower-moving companies struggling to keep up.
- Decreased Efficiency: AI can automate repetitive tasks, saving time and resources. Businesses without AI miss out on these gains, spending more on labour and slowing down their processes.
- Missed Insights: AI-driven analytics offer valuable insights that can drive strategic decisions. Without them, companies are forced to rely on guesswork or outdated data.
How to identify opportunities for AI
If you’re ready to adopt AI, here are some actionable steps to future-proof your business:
- Identify Repetitive Tasks: Start by looking for repetitive, manual tasks in your workflow. These are often the easiest to automate and can bring immediate efficiency gains. AI can handle processes like scheduling, invoicing, and customer inquiries, allowing your team to focus on strategic tasks.
- Focus on Core Processes with High Impact: Examine which business processes, if improved, would have the biggest impact on your bottom line. Could your sales team benefit from predictive analytics? Would an AI-powered chatbot improve customer service? By integrating AI in areas that have a direct impact on revenue or customer experience, you’ll quickly see a return on investment.
- Enhance Decision-Making: AI can provide data-driven insights that refine your strategy and help you stay competitive. Look into AI tools that analyse large data sets, identify trends, and help you make better decisions about inventory, marketing, and product development.
Getting Started with AI: Practical Tips
- Stay Informed: Keep up with trends in AI by reading newsletters, attending industry events, and following tech leaders on social media.
- Experiment with AI Tools: Don’t hesitate to test AI solutions with a low-risk approach. Many tools offer free trials, allowing you to experience firsthand how AI can benefit your processes.
- Seek Domain Expertise: AI’s true power lies in solving industry-specific challenges. If you’re in finance, healthcare, or another specialised field, look for AI applications tailored to your industry’s needs. Partner with experts if necessary.
- Educate Your Team: Encourage employees to learn about AI and how it applies to their roles. This buy-in will ease the transition and inspire creative use cases. You can also consider training your team to automate their own workflows with AI.
Don’t Wait Until It’s Too Late
The world is rapidly changing, and businesses that fail to embrace AI risk being left behind. Just as Blockbuster’s refusal to evolve led to its decline, companies that ignore AI today may find themselves in similar positions tomorrow. Emulate Grammarly’s proactive approach: start small, scale up, and use AI to stay competitive. Don’t wait until it’s too late.