Revolutions have never happened as quickly as they have recently, and I think it’s just the beginning.
Do you remember the world before the coronavirus pandemic? I do, and I miss those times. Yes, we’ve returned to many routines: we are not wearing mandatory facemasks, we no longer keep our distance, and we still get sick. However, the world has changed dramatically. It’s hard to look at just one perspective, but let’s try. Business-wise, never before have so many people worked from home or from wherever they are. And it’s okay (well, not for everybody; some bosses still haven’t fully understood the shift).
E-commerce exploded, and even though it developed quickly, even optimists were surprised by the scale. Some people started to believe that this growth of e-commerce would last forever, forgetting that everything in nature strives for balance. They forgot (or never heard) my favorite sentence from my favorite Buddhist monk, Ajahn Brahm: “This too shall pass.” Many businesses collapsed or at least weakened significantly, first because of the pandemic, then due to overly optimistic assumptions.
But this was just a warm-up, an introduction to a story that Alfred Hitchcock would be proud of. On 30 November 2022, ChatGPT was launched, and the world changed again. Many business owners realized their business models had no future, as they would be replaced. Others felt like a child in the world’s largest Lego store where everything is free. Oceans of possibilities opened up, with great ideas based on ChatGPT. Then, only a few months later, Dev Day happened, and the scenario repeated itself.
But now the action speeds up significantly. Just a few days later, the CEO of OpenAI, a face of Generative AI, is dismissed from his position under very strange circumstances. This is not an ordinary CEO, but one of the company’s co-founders. Moments later, another important person in the company resigns, followed by several more. Over the weekend, information surfaced that the management board was working to restore Altman to his position. On Monday, however, the CEO of Microsoft announced that Altman and his entire team are joining Microsoft (incidentally, the largest investor in Open AI). Over 700 employees signed a letter demanding the resignation of the current management and the reinstatement of Sam Altman. If not, they too will leave.
The question remains: how many businesses went bankrupt during this saga, how many failed to receive financing, and how many ideas were definitively buried? Although that’s not the most important thing. The most important thing is the feeling of uncertainty about what may happen tomorrow. Surely the lesson and conclusion must be that basing your entire business on one source is not a good idea, or at least a very risky one.
But these changes in technology, ownership, and management are only part of the whole story. The second part is demography, which will also change the image of reality.
When I read about Gen Z and some Millennials opting for Small Business Saturday instead of Black Friday, a trend not yet well-known in our part of the world, I feel it is a harbinger of changes we do not yet see. If I connect the dots, thinking about how Gen Z searches for information (not on Google, but on TikTok, and not by keywords but by whole phrases), how Gen Z seeks recommendations (not trusting reviews but only friends and selected influencers, and considering that another research shows that in some categories the number of fake reviews is over 30%), and when they buy (on the one hand, impulsively based on TikTok or Instagram recommendations from trusted sources, and on the other, consciously avoiding the mainstream), I know that there are a lot of sudden changes in stock ahead of us.
Especially since next year, there will be more Gen Z representatives in the labor market than Baby Boomers.
So, what are the conclusions? The obvious ones are:
- Rapid changes that affect not only technology but also the entire surrounding ecosystem make business decisions more risky, and the upheaval in OpenAI’s management illustrates the risks of over-reliance on a single technology or company for business strategy. The principle of “this too shall pass” highlights the temporary nature of trends, reminding businesses to prepare for eventual market stabilization.
- Developments in AI, especially in generative models, are creating opportunities and uncertainties in various industries. The emergence of technologies like ChatGPT has revolutionized business models, making some obsolete while opening new avenues for others, and it happens within not years or months but weeks.
- The preferences of Gen Z and Millennials, such as favoring Small Business Saturday over Black Friday and relying on TikTok for information, signal a significant shift in consumer behavior that businesses need to adapt to.
- Decentralization of Trust and Information: The declining trust in traditional reviews and the shift towards influencer recommendations and social media platforms for information signify a move towards more decentralized and personal modes of information and trust.
- Potential for Micro-Enterprises and Niche Markets: As mainstream markets get disrupted, there’s a growing potential for micro-enterprises and niche markets, driven by personalized, community-focused, and influencer-endorsed products and services. This could redefine market dynamics and create new opportunities for small and medium-sized businesses, especially considering that the decrease in brand significance has been observed for a few years already.
Michael Stipe, R.E.M.’s vocalist, sings ‘It’s the end of the world as we know it, and I feel fine’, and I couldn’t agree more, especially observing recent events that all happened within the last three or four years. So fast as never before.