The Value Creators Podcast Episode #30. Kartik Gada: The Impact Of AI on Entrepreneurship

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Hunter Hastings and Kartik Gada discuss the transformative dynamics of the digital economy and its profound implications for society, economics, and governance. Kartik Gada provides a compelling analysis of how the exponential growth of the high-tech sector is reshaping traditional notions of supply, demand, and pricing, highlighting the unique characteristics of digital goods that defy conventional economic models

Through a deep dive into the future of taxation, entrepreneurship, and individual specialization, they explore the disruptive potential of AI and automation in revolutionizing the way we work, create value, and interact with the economy. Kartik emphasizes the significance of cybersecurity and ethical considerations in the digital age, and the use of technology to ensure fairness and safety for all participants.

Resources:

Book: ATOM: It is time to upgrade the economy
ATOM on YouTube
Kartik Gada on LinkedIn

Knowledge Capsule:

Kartik Gada is a futurist. He analyzes current and past data and trends to forecast what will happen in the future, and he has built a formidable track record. He joined The Value Creators podcast to talk about the future of entrepreneurships, of economics and of government.’

We are living in an era of ever-expanding entrepreneurship

  • Technological disruption creates new opportunities for entrepreneurs.
  • The only profession that never gets displaced by technological disruption is entrepreneurship.
  • What makes a human redundant for a certain task is, simultaneously, free money for the entrepreneur.
  • Automation makes revenue streams cheaper to generate for entrepreneurs, increasing the profitability of entrepreneurial activity.

Entrepreneurship should win out and result in a more decentralized economy, less dominated by big business – but government gets in the way.

  • The first principles of the accelerating technological disruption (Kartik calls it ATOM – the accelerating technonomic medium) are in favor of entrepreneurship.
  • But nation states are a countervailing force – a cartel of governance that doesn’t want to give up power.
  • Big corporations find it easier to enter into protection agreements with governments (e.g. vis lobbying for favorable legislation) rather than undertake open competition.
  • The switch from centralization to decentralized entrepreneurship will be turbulent as a consequence.

Accelerating technology favors the emergence of new business models.

  • Smaller and smaller teams can produce software and make money.
  • Social media is an example of providing celebrity influencers with the tool to generate profitable revenue flows.
  • AI will be a supercharger, making otherwise unprofitable revenue streams into profitable ones by reducing labor costs.

More and more industries are arriving at their disruption point.

  • Economic growth has been slow until now. For 5000 years it was zero, but continuous improvement in technology pushes growth rates up.
  • The higher the percentage of technology in the economy, the higher the growth rate.
  • No industries are immune to the effects of technology.
  • At the macro level, the effect is higher growth. At the micro level, it’s the accelerated disruption of existing industries and firms.

Education is an example of an industry ready for disruption.

  • Education (especially higher education) is an example of an industry attempting to create false scarcity which will be unable to withstand the technological provision of abundance.
  • The english speaking world alone has a million schools with millions of teachers teaching the same thing every day.
  • Technology can replace this wasteful duplication – giving all children access to all the education they can consume.
  • Higher education aims at gouging people with a scarcity-based model that is redundant.
  • Hiring corporations will change their recruitment practices to hire smart students prior to university and educate them internally. After a couple of years they’ll have both practical knowledge and an understanding of firm culture, making them extra-valuable employees.
  • It will be a modern version of apprenticeship.

Healthcare is another.

  • Patients already prefer ChatGPT to their regular doctor visit.
  • ChatGPT answers unlimited questions and isn’t trying to get rid of you for the next patient.
  • Access is 24 hours a day and there’s no need for an appointment – no need to spend 2 hours traveling and waiting for a 10-minute appointment.
  • Eventually, AI will disrupt the pharmaceutical industry too – most pharmaceuticals are just a reverse engineering of something that exists in nature, in plants, and AI will give access to this information.

Accelerating technology produces deflation; central bank money printing offsets it.

  • Technology always brings cost reductions; as it becomes a great part of the economy, this will be deflationary.
  • But we have a debt system, and deflation can be disruptive in this context: less cash available to pay debt.
  • Government central banks should increase money printing to address this problem.
  • Since demand for the dematerialized products of technological acceleration can grow to infinity, central banks will need to increase money printing far beyond its level today.

AI should pay taxes, not humans.

  • Governments cause the biggest problems for the new technological era through their fiscal behavior.
  • They spend more and more on the low tech welfare state, and they use taxation of productive human beings to pay for it.
  • But if AI can replace human workers, then AI should pay the taxes.
  • Eventually technology will replace the welfare state. Many services are already free in the technology realm, or paid for indirectly through pure exposure to advertising.
  • Google already provides free food and access to wellness services for its employees.
  • Governments build power over citizens with the income tax model and will be reluctant to cede it.
  • But they won’t be able to hide their colossally wasteful inefficiency from citizens who are familiar with tech services.

The Value Creators Podcast Episode #29. Raushan Gross on Entrepreneurial Value Creation in the AI Economy

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Professor Raushan Gross, who teaches Business Management And Leadership at Pfeiffer University, has focused his most recent research on the impact and influence of A.I. on entrepreneurship. He published some of this research in a series of articles at mises.org. One of them links A.I. to The Wealth Of Nations, and, of course, the wealth of nations is driven by entrepreneurship. From this vantage point, Professor Gross identifies the multifaceted impact of AI on society, economics, and business strategies, advocating for a paradigm shift in management thinking to adapt to technological advancements.

Resources:

The Fate or Wealth of Nations: AI, Robotics and Automation

Will AI Learn to Become a Better Entrepreneur than You?

Prices, Food, Employment: AI and Robotics Are for Regular Folks, Not Just the Elite

Would You Hire an AI-powered McRobot or a Human Employee?

Artificial Intelligence Enhances Consumer Sovereignty

Artificial Intelligence Can Serve Entrepreneurs and Markets

The Fear of Mass Unemployment Due to Artificial Intelligence and Robotics Is Unfounded

Show Notes:

0:00 | Intro
2:27 | Exploring AI’s Impact on Entrepreneurship
7:18 | Can AI Surpass Human Entrepreneurship?
8:48 | Exploring AI as a Service and AI Stacking
12:08 | AI as a Team Member in Entrepreneurship
15:10 | Small and Medium Businesses Can Embrace AI for Strategic Advantage
17:13 | Transition to Autonomous Decision-Making with AI
21:13 | Concerns on AI Centralization and Oligopoly
25:15 | Adam Smith: Global Scale AI is the Wealth of Nations
26:40 | Elon Musk on Value Creation: the Value Meter
29:14 | Does AI Redefine Management by Value Metrics?
32:14 | Wrap-Up: Rethinking Management in the Digital Age

Knowledge capsule

AI changes how individuals and entrepreneurial firms interact with the market.

  • We can’t be sure of the form the interaction will take.
  • But we know that we are using AI in every market transaction
  • While some individuals have doomsday visions of AI, entrepreneurs ask, “How can I use this to improve my business and how I serve customers?”

Human ingenuity will always be a critical and irreplaceable part of entrepreneurship.

  • AI is an active tool for entrepreneurs.
  • It will be a competitive factor in servingand delighting customers.
  • It’s a service to entrepreneurs to help them succeed.

Entrepreneurs can assemble and combine bundles or stacks of AI services into complete business models.

  • Austrian economics explains how entrepreneurial business consists of combining and recombining value-facilitating assets.
  • This is precisely how entrepreneurs utilize AI.
  • There’s no need to own the assets, just to control them and their value direction, and this is the business service that today’s AI tools offer.

AI can be a team member in value creation teams recruited by entrepreneurs.

  • Most productive work is done in teams.
  • AI can be a team member, bringing new knowledge, querying and challenging existing knowledge, and helping to advance knowledge-building at speed.
  • AI can also automate a lot of implementation processes, freeing entrepreneurs to focus on creativity and innovation.

AI will also play a role in technological deflation.

  • While governmental monetary and fiscal policy creates inflation, the role of the entrepreneur and technology is deflationary: making production faster and lower cost with improved quality.
  • AI will contribute by lowering the costs of doing business.
  • Entrepreneurs will be more empowered and the general level of well-being will rise.

Any risks lie in the danger of centralization of AI.

  • Will governments centralize AI under their singular control?
  • WIll the massive investments required in building AI server farms and databases and LLM’s result in a few corporations controlling AI for the whole economy?
  • It’s more likely that entrepreneurs will be able to build their own models using base LLM as a platform.

One of Elon Musk’s innovations points to AI as a “value meter”.

  • Algorithmic management at Tesla includes the ability of AI to assess the real time value creation product resulting from a team’s work with the resources at its disposal.
  • The AI can simultaneously scan all the other value creation opportunities available at the same time and reallocate teams and resources to higher value uses.
  • In this way, AI acts as a “value meter” for the productive activities of a work force and factory.

Global Competition in AI:

  • There will be a global race for AI dominance among nations.
  • Those nations that are most  energetic and innovative will shape the future landscape of AI development.

The Value Creators Podcast Episode #28. Chet Richards: Certain To Win

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Chet Richards discusses the intersection of military strategy and business leadership, offering valuable insights for navigating complex environments. Emphasizing the importance of agility and adaptability, Chet explores Colonel John Boyd’s OODA Loop concept, highlighting the need for continuous observation, orientation, decision-making, and action. 

He underscores the role of leadership in shaping organizational culture, driving innovation, and maintaining an external focus for sustained success. The idea of being “certain to win” is derived from Sun Tzu’s teachings, emphasizing the importance of constant self-evaluation and continuous self-improvement, conducted from an external perspective.

Resources: 

Chet Richards on LinkedIn

Certain To Win: The Strategy of John Boyd Applied To Business

Zen Mind: Beginner’s Mind: 50th Anniversary Edition

Show Notes:

0:00 | Intro
3:00 | Chet’s Perspective of Strategy: Strategy is about people
09:22 | Vision: Attraction and Uplifting Spirit
17:08 | Centrality of Time in General
25:14 | Helping Companies with Reorientation: Many-Sided Implicit Cross-Referencing
29:15 | Old and New Experiments and Allocating Resources for Success
33:34 | Ambi Dexterousness: Chaos Theory, It’s Called Explore and Exploit
41:52 | Culture as Opposed to Organization
42:24 | Wrap-Up: Culture as Developing External Focus and Acting on It

Knowledge Capsule

Strategy is about people.

  • It’s an error to think about strategy in terms of numbers (like market size and shares), spreadsheets, or plans and analyze competitive strengths and construct competitive advantages. 
  • Strategy is entirely about people and how they work together.

People should be “stoked up” and in harmony.

  • Ask if the people in your firm are “stoked up” – inspired by a shared vision, energized by a shared mission, and excited about what can be achieved.
  • And are they in harmony – fully aligned and all pulling in the same direction?

The harmonious team maintains an External Focus and an Open System:

  • Leaders emphasize the significance of maintaining an external focus in business.
  • Leaders operate as open systems, avoiding internal entropies.
  • Stress the importance of adapting to external changes for organizational success.

If these conditions are met, the externally-focused firm can move forward towards success, whatever the chaos of the world.

  • Unexpected events, surprises, setbacks, and unplanned opportunities represent the natural state of the world.
  • Different people within the firm will react differently, but if they are all pointed in the same direction towards a shared goal, a creative shared response to the changing environment will emerge.

Challenges in Maintaining External Focus:

  • It’s hard to maintain an external focus over time.
  • Highlights the role of leadership, particularly the CEO, in initiating and maintaining external orientation.
  • Emphasizes the need for tangible actions, mechanisms, and a culture encouraging an external focus.

Bureaucratic Challenges:

  • Internal bureaucratic hierarchies represent a challenge for the externally oriented firm.
  • There’s an inevitable tendency for individuals to prioritize internal career advancement.
  • This has a negative impact on innovation when internal orientation prevails over external market dynamics.

Cultural Strategy:

  • Think of “culture” and “strategy” interchangeably.
  • Culture plays a critical role in organizational success.
  • Culture aligns with the principles of harmony and orientation, essential for an effective strategy.

Portfolio of Experiments:

  • A business is a portfolio of experiments.
  • Discusses Lockheed’s skunkworks approach as an example.
  • Notes the challenge of maintaining viability for experimental endeavors alongside established operations.

Certain to Win Philosophy:

  • Chet Richards derives the concept of Certain To WIn from Sun Tzu’s teachings.
  • Focuses on constant self-improvement and self-evaluation.
  • Advises leaders to concentrate on fundamental aspects, harmonize efforts, and remain open to creativity.
  • Winning consists of passing one’s tests, not those of others.

The Value Creators Podcast Episode #27. Mark McGrath on Entrepreneurship Versus Managerialism

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Adaptive entrepreneurship refers to a dynamic approach to business leadership and business practice that embraces continuous learning, rapid adaptation, and the creation of novel ideas. Mark McGrath and Hunter Hastings discuss the critical aspects of adaptiveness in dynamic environments. They explore the aftermath of failure to adapt to nonlinear external change. The conversation emphasizes the importance of the shift from traditional management to adaptive leadership, as defined by a fusion of entrepreneurial economics and John Boyd’s unique approach to “the whirl of reorientation”, and focusing on the importance of influencing and inspiring collaboration, as contrasted with managerial control.

Mark McGrath highlights the role of appreciation leadership, recognizing the worth of ideas, and fostering human interaction. He advocates for continuous reinvention and the active creation of mismatches to outpace competitors. Entrepreneurs need to embrace adaptive systems, prioritize human-centric leadership, and leverage novel ideas for sustained success in ever-changing business landscapes.

Resources: 

AGLX – Consulting & Coaching Group:

aglx.com

The Adaptive Entrepreneurial Business Model Graphic:

The-Adaptive-Entrepreneurial-Business-ModelDownload

Mark McGrath on LinkedIn:

https://www.linkedin.com/in/markjmcgrath1/

Show Notes:

0:00 | Intro

01:50 | Rethinking Management Amid Uncertainty

04:23 | Entrepreneurship: Navigating Uncertainty for Value Creation

06:38 | Entrepreneurship as a Continuous, Never-Ending Process

08:50 | Massive Mismatch: Preserving vs. Exploring New Futures

14:16 | Disruptive Innovation

15:19 | Entrepreneurial Method as Continuous Ongoing Loop of Value Creation

20:21 | Idea of Entrepreneurial Intent

22:42 | Positive and Negative Feedback: Feedback Loop

25:12 | Organizational Structure and Empowerment in Business and the Military

34:56 | Quantification VS Qualitative Analysis

38:02 | Rethinking Management VS Embracing Adaptive Systems

39:20 | Wrap-Up: Mark McGrath’s Concept of Leadership

Knowledge Capsule:

Defeating Linear Thinking::

  • Failure in business often stems from an inability to adapt to nonlinear external change.
  • Possessing resources is insufficient without the right frame of thinking.
  • Success requires constant adaptation to unpredictable challenges.

Boyd’s Leadership Philosophy:

  • Emphasis on leadership quality over command and control.
  • Leadership is defined as the art of influencing and inspiring collaboration.
  • Appreciation leadership focuses on recognizing worth and understanding how things work.

Reinventing Management:

  • Hunter Hastings proposes to replace the term “management” with an adaptive system.
  • Mark’s response: we don’t use the term “management” and don’t think about it. Leadership quality, not a title in a hierarchy, is crucial for success.
  • Advocacy for a mindset shift away from traditional management approaches.

Continuous Adaptation:

  • Organizations must continually reinvent themselves for sustained success.
  • Industry leaders like Steve Jobs and Warren Buffett exemplify the importance of creating novel ideas.
  • The ability to adapt to changing landscapes is paramount for thriving in dynamic environments.

Human-Centric Leadership:

  • Appreciation leadership promotes human-to-human interactions.
  • Recognition of worth and understanding of how things work are crucial.
  • Contrasts with isolating command and control approaches.

Creating Mismatches for Success:

  • Mark McGrath encourages the cultivation of mismatches or novel ideas. 
  • Adaptive systems recognizing value and fostering continuous learning are keys to success.
  • Gaining a competitive edge involves disrupting the status quo with innovative thinking.

The Value Creators Podcast Episode #26. 11 New Mental Models for Business

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Mental models are defined as fundamental assumptions that shape the way individuals perceive and interact with the world. When our mental models are wrong, we can’t see the world as it really is. New mental models introduce a new and better understanding. This episode of the Value Creators podcast introduces eleven fundamental mental models, ranging from understanding value as a subjective creation within the minds of customers, to the strategic accumulation of knowledge within a firm, to the pivotal role of empathy and the transformative nature of marketing as behavior. Each mental model contributes to a new holistic paradigm designed to guide entrepreneurs in creating sustained value.

Mental models contribute to the necessary shift in business mindsets towards a dynamic approach that emphasizes the continuous flow of experimentation and the ongoing refinement of knowledge through error correction. 

Resources: Hunterhastings.com

Shownotes:

0:00 | Intro: Choosing Right Mental Model for Success

02:43 | Mental model Number 1: Value is Created by the Customer

04:07 | Mental Model Number 2: Knowledge

05:13 | Mental Model Number 3: Empathy 

06:23 | Mental Model Number 4: Marketing

07:26 | Mental Model Number 5: Design

08:15 | Mental Model Number 6: Innovation

09:30 | Mental Model Number 7: Entrepreneurship

11:08 | Mental Model Number 8: Finance and Accounting

12:13 | Mental Model Number 9: Organization

13:08 | Mental Model Number 10: Business is a Flow

14:05 | Mental Model Number 11: Knowledge Accumulation

15:20 | Wrap-Up: Value Creation For Customers

Knowledge Capsule:

Mental Models for Success:

  • Mental models as fundamental assumptions about how the world works…
  • Correct mental models lead to valid conclusions, while incorrect ones result in mistakes.

Mental Model Number 1: Value Creation Paradigm

  • The customer is the creator of value.
  • Challenge the traditional view of businesses creating value; instead, recognize customers as value creators – since value is subjective and is generated in their minds.

Mental Model Number 2: Customer knowledge is the source of competitive advantage

  • A lasting competitive advantage for firms comes from accumulating and compounding customer knowledge and understanding..

Mental Model Number 3: Empathy as a business tool

  • The tool for building customer understanding is empathy.
  • Empathy is not “thinking as they think” – it is a simulation of the customer’s experience and how the customer evaluates it.
  •  The simulation enables businesses to understand and address customers’ unmet needs.

Mental Model Number 4: Marketing is behavior not communication

  • Marketing is not communication and persuasion.
  • Marketing is behavior, an act of love towards customers.

Mental Model Number 5: Reverse the flow of design

  • Design is working backwards not forwards – backward from the customer and their experiences and desires., 
  • By working backwards, design ensures that customer wants are integrated seamlessly into products and services.

Mental Model Number 6: Innovation is continuous

  • Innovation is not an event – it must be continuous, unceasing experimentation and improvement.
  • The greatest innovation lies in innovating new business models..

Mental Model Number 7: Entrepreneurship is the only route to value creation

  • The value creation process is enabled through entrepreneurship, not management.
  • Entrepreneurship translates customer’s genius in sensing that things could be better (How do they know?) into innovative products or services through continuous new action.

Mental Model Number 8: Finance and Accounting should look forwards as well as backwards

  • Traditional accounting can’t accommodate value creation – the intangibles that create customer value.
  • Make sure your accounting balances backward-looking tracking with forward-looking economic calculation.

Mental Model Number 9: Rethink organization

  • Don’t organize!
  • Encourage self-organization and autonomy for employees interfacing with customers.

Mental Model Number 10: Business as a Flow

  • Don’t plan!
  • Adopt a continuous flow approach in business and individual work.

Mental Model Number 11: Unceasing knowledge Accumulation

  • Constantly critique and improve knowledge through collaborative open-minded critique and error correction.

The Value Creators Podcast Episode #25. Jacqueline Porter on The Power of Visual Design

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Visual design is an important element in value creation, especially in telling a brand’s or a business’s story in a way that engages with customers and communicates shared values. Visual designers are multi-talented artists and storytellers with an acute understanding of customers and their emotional responses to visual cues. Our guest this week is Jacqueline Porter, an accomplished professional in her field and a very successful business owner in her own right.

We explored the business of design and creativity from the challenges within design education, and the drawbacks of rigid design frameworks and the value of subjective, creative approaches. A notable reference to a transitional figure in design Steve Jobs shows how simplicity and creativity – rules and no-rules – can work together.

The conversation moves to the realm of implementation in branding, exploring the delicate and shifting balance between fixed and flexible elements. Jacqueline advocates for constant evolution, telling a story with a dynamic interplay between exploration and exploitation for sustained success. Consistency is achieved with creativity, empathy, and adaptability.

Resources: https://www.jacquelineportercreative.com/

Shownotes:

0:00 | Intro

02:28 | Jacqueline’s Defines Visual Design: Inclusions, Exclusions and Importance

03:54 | Nike Example: What Represents a Good Design?

05:32 | Jacqueline on Branding: Advertising’s Impact

06:54 | Professional Approach: Visual and Wood Synergy in Business

09:28 | Clients Don’t Know What They Want: Process VS magic

11:02 | Lum Spirits Story

15:51 | Color Palette: First Step for Visual Representation of Lum Brand

20:09 | Visual Design Mastery: Empathy, Psychology and Branding

21:23 | History of Rules VS No Rules

22:54 | Newtonian Economic Thinking and Bauhaus Analogies

24:42 | Steve Jobs Simplicity is a Transitional Example

26:27 | Designer Examples: Getting Outside of the Box

29:05 | Crack is Wack

32:22 | Implementation of Design

34:50 | Wrap Up: Fixed and Flexible Idea

Knowledge Capsule:

We can all think of excellent elements of great visual design:

  • They become an important part of our lives, our thinking, and our engagement with the world.
  • Jacqueline chose the Nike swoosh to illustrate.

Subjectivity in Design:

  • Design is a field where the subjectivism we advocate in value creation is uniquely valuable.
  • Every customer will respond personally and idiosyncratically to visual design stimulus. It will mean something different to different people.
  • Understanding the psychology of subjective value is a skill for designers.
  • Breaking traditional rules can generate more acute emotional responses..

There was a 20th century movement to make design obey objective rules: “good design”.

  • Bauhaus is associated with the “good design” concept, with prescriptive rules about function, simplicity and order.
  • When these rules were taught in design schools, it raised concerns about students becoming replaceable, like interchangeable parts, due to strict design boundaries.
  • New approaches like the Stanford D School approach left these rigidities behind, introducing the same empathic process for design as we use for value creation: understanding customer emotions, preferences and contexts comes first.

Steve Jobs as a Transitional Example:

  • Steve Jobs, despite being rules-oriented, broke conventions creatively.
  • Achieving simplicity in design while incorporating complexity in technology.

Examples of Breaking Design Rules:

  • David Carson’s defiance of good design ideals led to influential graphic design in Ray Gun.
  • Exploration of unconventional layouts, upside-down pages, layered typography, reflecting punk culture.

Great design can have huge social impact:

  • “Crack is Wack” : Keith Haring’s appeal from the heart about the crack cocaine epidemic..
  • The powerful impact of design in raising awareness and creating a call to action.

Empathy and Emotional Storytelling:

  • Hunter and Jacqueline discuss the recurring theme of empathy in effective design.
  • Emotional storytelling through research and understanding user experiences.
  • Jacqueline described the storytelling journey of Lum vodka seltzer from “illuminating the night” to “illuminating life” led to a major visual rebranding.

Brand Design and Implementation:

  • Discussion on the balance between fixed and flexible elements in branding.
  • The need for consistency in brand recognition while allowing for creative evolution.
  • Embracing constant change and evolution in design.
  • The balance between exploration and exploitation for sustained brand success.

Visual design parallels value creation in its leverage of creativity, rule-breaking, empathy, and constant evolution in the field of design and branding.