For decades, AI only offered incremental improvements (e.g., 20% better fraud detection), which benefited large incumbents. Generative AI is a step-change, enabling entirely new user behaviors like creativity and emotional connection, creating the "1000x better" disruption needed to build new, iconic companies.
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Using AI for incremental efficiency gains (10% thinking) is becoming table stakes. True competitive advantage lies in 10X thinking: using AI to fundamentally reimagine your business model, services, and market approach. Companies that only optimize will be outmaneuvered by those that transform.
Most companies use AI for optimization—making existing processes faster and cheaper. The greater opportunity is innovation: using AI to create entirely new forms of value. This "10x thinking" is critical for growth, especially as pure efficiency gains will ultimately lead to a reduced need for human workers.
The focus on AI automating existing human labor misses the larger opportunity. The most significant value will come from creating entirely new types of companies that are fully autonomous and operate in ways we can't currently conceive, moving beyond simple replacement of today's jobs.
Traditional software automated standardized processes but struggled with complex human interactions like call center support. Generative AI's ability to understand natural language allows software to automate these nuanced tasks, dramatically expanding the total addressable market by tackling problems that were previously impossible to solve with code.
The most durable moat for enterprise software is established user workflows. The current AI platform shift is powerful because it actively drives new behaviors, creating a rare opportunity to displace incumbents. The core disruption isn't just the tech, but its ability to change how people work.
The common analogy of AI being "like a website" that every company must adopt may be misleading. The real transformative power of AI could be in enabling entirely new, AI-native businesses that leapfrog incumbents, rather than simply being a feature tacked onto existing products.
While GenAI continues the "learn by example" paradigm of machine learning, its ability to create novel content like images and language is a fundamental step-change. It moves beyond simply predicting patterns to generating entirely new outputs, representing a significant evolution in computing.
AI isn't just an incremental improvement; it's a reinvention of the computer. This new paradigm makes previously intractable problems—from curing cancer to eliminating fraud—solvable. This opens up an unprecedented wave of entrepreneurial opportunity to rebuild everything.
Veteran VC Navin Chaddha argues that AI's impact is an order of magnitude greater than previous tech waves. This is because AI's conversational interfaces democratize creation for billions, while its ability to reason and act provides a second 10x force multiplier, resulting in a 100x total opportunity.
The true measure of a new AI model's power isn't just improved benchmarks, but a qualitative shift in fluency that makes using previous versions feel "painful." This experiential gap, where the old model suddenly feels worse at everything, is the real indicator of a breakthrough.
