The Invisible Revolution: How AI has Become the New Electricity of Business
Something fascinating is happening in business today. The traditional boundaries between how we create products and how we engage with customers are dissolving. It's not just happening gradually – it's accelerating, and it's fundamentally changing how successful businesses operate.
The Great Convergence: More Than Just Another Technology Shift
Think about electricity's impact on manufacturing in the early 20th century. Initially, factory owners simply replaced their steam engines with electric motors – keeping the same factory layout, the same processes, the same thinking. It wasn't until they completely reimagined manufacturing around electricity's capabilities that the real revolution happened.
We're at the same inflection point with AI. Companies that simply add AI capabilities to existing processes are today's equivalent of those early factories that just replaced steam with electric motors. They're missing the bigger revolution.
Why This Time It's Different
The electricity analogy helps us understand the scale of change, but AI is doing something electricity never could: it's actively learning and evolving. Imagine if electrical systems had continuously learned how to distribute power more efficiently based on usage patterns. That's what AI enables for business processes.
The Evolution: From Separation to Convergence
I started work in IBM in September 1977, so have travelled through the majority of these changes.
1945-1980: The Traditional Period
1980-2000: Transition - The Digital Dawn
2000-2024: Contemporary - The AI Acceleration
2024 and Beyond: Future - The Age of Convergence
What This Means in Practice
Let's make this concrete with some non-financial examples:
Tesla's Continuous Evolution
Every Tesla vehicle is simultaneously a product and a customer engagement platform. Each mile driven teaches the AI system, which improves the product for all users. The distinction between product development and customer experience has completely disappeared.
Spotify's Living Product
Spotify's recommendation engine isn't just a feature – it's the product. Every interaction teaches the system, making it better at engaging users. The product literally evolves with each use.
Netflix's Content Creation
When Netflix creates new shows, they're not just using focus groups – they're leveraging millions of real-time viewing patterns. The boundary between content creation and content consumption has dissolved.
And how about FinTech? They have been using Machine Learning longer than most. They also have some of the most innovative AI usage.
Stripe's Adaptive Risk Management
Every transaction through Stripe's platform isn't just a payment – it's a learning opportunity. Their AI systems continuously adapt fraud prevention measures based on real-time patterns. The product evolves with each transaction, becoming smarter at distinguishing legitimate transactions from fraudulent ones. Customer engagement (making payments) directly drives innovation (better fraud detection), which in turn enhances customer engagement (fewer false positives).
Klarna's Dynamic Credit Decisions
Klarna's "buy now, pay later" platform demonstrates this convergence perfectly. Their AI doesn't just make credit decisions; it learns from every purchase, repayment, and customer interaction. The credit assessment model continuously evolves based on actual customer behavior, not just traditional credit metrics. Each transaction makes the system smarter at matching credit offerings to customer capabilities.
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Wise's Smart Routing
Wise's money transfer system exemplifies how customer engagement directly drives innovation. Their platform learns from every transfer, automatically optimizing routes for speed and cost. The more customers use the system, the more efficient it becomes at finding the best transfer pathways. Customer usage patterns directly inform and improve the product's core functionality.
Plaid's Adaptive Authentication
Plaid's financial data infrastructure shows how the boundaries between product and customer experience have dissolved. Their authentication systems learn from every connection, automatically adjusting security measures based on user behavior patterns. The product becomes more secure and user-friendly simultaneously, with each customer interaction teaching the system how to better balance security and convenience.
Revolut's Real-Time Product Evolution
Revolut's platform demonstrates the ultimate convergence of innovation and engagement. Their app features evolve based on real-time usage patterns. Popular features get prominently displayed, while underused ones get refined or replaced. The product literally reshapes itself around customer behavior. When they launched cryptocurrency trading, the feature's placement and functionality evolved in real-time based on user interaction patterns.
The New Rules of FinTech Evolution and Performance
This convergence is establishing new truisms in finance:
What Does this Mean for Your Business
The implications are profound. My recommendation is to start at the strategy level, run a strategy workshop if necessary, and reimagine everything with AI integral to everything you do. At the very least:
1. Rethink Your Structure
Just as no modern company has a "Vice President of Electricity," future organizations won't have separate AI departments. AI will be so deeply embedded in how businesses operate that separating it out won't make sense.
Although, with the complexity of AI and its ability to learn and evolve, I'd start with a Chief AI Officer in c-suite in larger organisations.
2. Reimagine Your Processes
Stop thinking about product development and customer engagement as separate functions. Start building systems that turn every customer interaction into a product improvement opportunity.
3. Rebuild Your Capabilities
The goal isn't to add AI to existing processes but to reimagine your business around AI's capabilities.
Looking Ahead
The most successful businesses of the next decade won't be those with the biggest AI budgets or the most data scientists. They'll be the ones that best understand and implement this convergence of product innovation and customer engagement.
Our diagram shows the historical trajectory and future projection of how innovation and customer engagement are converging. The exponential nature of the curves reflects the accelerating pace of this convergence as we approach the AI era.
The Question That Matters
So ask yourself this: How many steps are there between customer insight and product improvement in your organization? How many meetings, how many approvals, how many delays?
Evolutionary Competitive Advantage will come to those who reduce this number to zero.
Take Action Now
The future isn't about better products or better customer engagement. It's about creating systems where products and customer engagement are one and the same. That's the invisible revolution happening right now.
What steps are you taking to make this convergence a reality in your business?