Michael Mauboussin: AI: We’re In The Early Stages of Tech Adoption

In his latest interview with Bill Gurley on the Invest Like The Best Podcast, Michael Mauboussin outlines a typical pattern in how companies adopt new technologies. Initially, technologies are integrated into existing workflows to boost productivity in specific areas without major changes to core processes.

Over time, as the benefits become clearer, companies reorient their operations around these technologies, leading to substantial transformations. Historical examples include electric engines and the internet, which initially supplemented existing functions but eventually spawned internet-first businesses.

Currently, we are in the early stages of adopting a new technology, with widespread discussion but limited full integration into company operations. Here’s an excerpt from the interview:

Mauboussin: I like the fact you say, “in the abstract,” since I don’t know that much about what’s going on. But what history would tell us is that as new technologies come in, companies typically have some sort of a workflow, and the new technology will come in and help productivity and efficiency for that company, but they don’t completely reorient their workflows initially. So the first generation is it amplifies but kind of in different spots.

And then as time goes on, you reorient your business around that core technology that allows you to really unlock the different productivity potentials. Go back to electric engines back in the day, but the most recent example would be the Internet, where first wave was just sort of adding on to something that already happened. And then you had a whole wave of companies that were Internet first and completely reoriented.

We’re probably early in this phase where companies are thinking — every company is talking about this. Obviously, you see this, for example, on conference call mentions and so forth, but very few companies have probably fully integrated this into what they’re doing, and it’s going to take some period of time to have that happen. I don’t know, Bill, if you agree with that or if you see that in your own businesses you work on.

You can listen to the entire discussion here: