Published on December 27, 2023, 7:24 am

In the early 2000s, there was a lot of buzz surrounding internet-enabled home appliances. Imagine having a dishwasher or fridge that could connect to the internet! It seemed like something out of a futuristic cartoon. However, fast forward to today, and you’d be hard-pressed to find anyone who actually owns one of these smart appliances. So, what went wrong?

The problem was that these devices were created without considering the needs and problems of the customers. Instead of focusing on functionality and solving real issues, the makers focused on simply showcasing new technology. As a result, these gadgets became nothing more than museum pieces – forgotten by most and owned by even fewer.

Now, let’s shift our attention to generative AI. The hype surrounding this technology is growing every day. We know that artificial intelligence (AI) has the potential to bring about significant change in various industries, just like how the internet and cloud technologies did before. However, if we focus too much on the tools and not the problems they can solve, we risk wasting resources on mere science projects.

So what does generative AI mean for small to medium-sized businesses (SMBs)? CEOs and board members should be asking themselves important questions: How will generative AI affect my business? What impact will it have on my existing value proposition? When will we start seeing its effects on our customers? How will it change our business model? And most importantly, is our organization prepared for these changes?

These questions may seem overwhelming at first, but they are basic business questions that have been asked whenever a new technology is introduced. When the internet emerged and when cloud technology was introduced, companies had similar concerns about how these innovations would affect their businesses and transform customer expectations. Those companies that treated these questions seriously tend to have different outcomes compared to those who didn’t.

Let’s take a look at some examples of companies that embraced technology to solve pain points and improve their value propositions. FedEx noticed that the paperwork required for their couriers was causing them to lose precious time. So, they partnered with Motorola to develop custom handheld devices that eliminated the need for paperwork, saving each courier 10 seconds at each stop. This investment of $150 million was projected to save the company approximately $20 million per year.

Netflix is another great example. They recognized that customers were unhappy with incurring late fees, so they created a mail-in model without late fees. As cloud technology developed, Netflix made a bold move by switching from their successful mail-in DVD model to on-demand, unlimited streaming. They kept asking themselves how they could improve the customer experience, and they used available technology to solve real pain points.

Now let’s shift our attention back to SMBs. These companies may not have the same amount of resources as larger businesses, but they have an advantage when it comes to using new technology – they are often more nimble and hungry for innovation. While larger businesses can afford to experiment with new technology without major consequences, SMBs must be more intentional with their choices. A failed project can have serious financial consequences for smaller companies.

According to a research report by McKinsey, generative AI has the potential to make a significant impact on the global economy, with estimated revenues ranging from $2.6 trillion to $4.4 trillion. However, it’s important not to overlook AI as a whole because it encompasses much more than just generative AI. The estimated revenue from AI technologies as a whole is projected to reach an astonishing $11 trillion to $17.7 trillion.

When considering generative AI for your business, it’s essential to think about long-term problems and how this tool can help provide solutions. It’s crucial not to get caught up in the hype surrounding specific applications like ChatGPT but instead focus on solving real customer pain points using tools you understand.

In conclusion, generative AI holds great potential to transform businesses and create value. However, it’s important for SMB leaders to approach it with intention and focus on solving real problems rather than getting lost in the hype. By understanding customer pain points and using technology tools wisely, companies can create lasting solutions that deliver better value to their customers.

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