It always comes down to money

Last week, I came across two good pieces of content. The first one was from Goldman Sachs, titled, 'GEN AI: Too Much Spend, Too Little Benefit? The second was a piece from The Wall Street Journal called,  'It’s Time for AI to Start Making Money for Businesses. Can It?'

The announced capital expenditure by various companies is over $1 trillion dollars, and the question now is, 'Where and how do they get the money back?' We are getting the plumbing and infrastructure in place. It is time for companies to start utilizing these new technological wonders. The question, 'How?' is critical for all the vendors selling AIware. They are trying to create stories and paint a bright future for their customers.

This is where this whole AI thing becomes tricky.

Let me share a short story with you.

Many years ago, I went to a conference for CEOs of tech companies. It was a highly enjoyable event, with great conversations. I learned a lot.

One of the presentations I still vividly remember was about how to grow a company. The presenter asked the audience a very simple question.

'Would you know how to make an extra $5 at your company today?' The room, full of alpha CEOs, exploded with confidence and everyone raised their hand. Then, the presenter asked about $50, $500, $5,000. At $500,000, there was not one single hand up. The room became quiet. To that, the presenter said, 'And that's your problem.'

Since most, if not all, CEOs were running tech companies, you would think that knowing anything and everything about technology would make their companies the poster child of growth and innovation. But knowledge of technology doesn’t always translate into higher revenue and/or profitability.

Now back to the promise of AI.

Let's start with a simple question: 'Do you think that hiring someone who knows everything about AI will propel your company to double-digit growth?'

Since the introduction of ChatGPT to the public, the term ‘AI’ became a generic word for a technology utopia where AI prophets and philosophers preach to the masses. Where everyone is competing to outdo each other. From AI, to agentic AI, to guided AI agents, everyone is trying to tell you that without AI, you and your company are doomed.

The issue is that none of these people are running companies where they have to answer this difficult question: How do I make an extra $5 with my company today? How can we grow?

Here is a very good article from the Harvard Business Review, titled, How Fast Should Your Company Really Grow? From 680 public companies, only 7 were able to achieve sustainable growth over a period of 34 years.

Did these companies use technology? Of course they all did, but the successful ones had better strategy. The technology is here just to support it.

The recurrent pattern? It is far better to focus on how to make an extra $5 today.