Guy Reams (00:00.654)
This is day 231. It's not adoption, it's evolution.
So there clearly is a new mentality developing that the widespread use of AI technologies as a core part of business operations is inevitable. I think I can remember Mr. Smith telling Neo in The Matrix that it was not an impossibility, but rather an inevitability that would lead to the death of the human species. So inevitability is the theme. And from what I can see, this is probably true.
Not the death of the human species, but the adoption of AI, which leads to another thought that I'd like to address. Many people have the idea or fear that companies that fail to adopt AI technologies will fail. Whereas the ones that successfully diffuse the new technologies will survive. I heard someone yesterday use the example of Kodak to provide an illustration to their point. However,
That is not a good comparison because Kodak did adopt the new digital photography using CCD. In fact, one of their engineers held the original patent. Some have erroneously said that Kodak decided to downplay digital photography and preferred to stay with their quite successful print business. I'm sure that had a lot to do with their slow changes. The print business was huge, of course.
But this is only partially true because I know for a fact that Kodak was trying to stay competitive in digital photography because I have one of their late 80s versions of a digital camera sitting in my garage. I dug it out this weekend. And sure enough, the logo Kodak is right on the front of a digital camera. So Kodak was one of the first to market mainstream market with a digital camera.
Guy Reams (02:02.062)
The question is not whether Kodak adopted the new technology. The question is whether or not Kodak has successfully evolved. To state that you need to invest in AI or your company will fail is not the correct thought. Adoption of AI technology is inevitable. The question is whether or not the company will evolve along with all the changes that AI will bring. Clearly, Kodak did not evolve.
Even though they had vented the technology and were one of the first to market, the company as a whole did not evolve and therefore was not sustainable. Kodak remains as a company today, largely business -to -business focused company on print and motion pictures. A better example of this scenario is Sears. I know this story well because I lived it. My generation was probably one of the last to buy most major household goods from a Sears catalog.
Although there were stores in our community, the Sears catalog was in every home. It was the primary method of getting many of the common household goods delivered to your home. It was the Amazon of its time. Sears capitalized on this business to bring their top selling items to your community in the form of a retail department store. And that was the primary method for most people to buy essential wares. I remember the day that Netscape came out.
and we were able to display graphical HTML pages from the World Wide Web for the first time. I was working by this time and more than one person started to get the bright idea to start selling things online. That did not take very long to happen at all. However, e -commerce as we know it today was not commonplace until the late 1990s. Amazon and eBay were probably the beginnings of mainstream e -commerce.
The period from 1995 to 2000 would mark the launch for the commercial sales on the internet, specifically household goods, which was direct competitive to Sears. Amazon would not even turn a profit in this business model until late 2001. Now Sears was not slow to adopt. They were not trying to be an old dinosaur relic with their head in the sand.
Guy Reams (04:24.75)
They were trying to adopt this new technology as fast as they could. They launched their first e -commerce site as early as 1997, three years before the likes of Walmart, Target, and Best Buy would. They even had an exclusive agreement with American Online for a co -branded shopping site on the AOL platform. Before 2000 came along, most of their catalog was now online, and in the year 2000, they made major upgrades to their website.
In terms of reach, catalog depth, and features, they rivaled any online retailer of the time. So this was not an adoption issue. They were adopters. And in fact, they were one of the first major retailers to have this level of adoption. They did not have their heads in the sand, as many people like to think. They had leadership assigned to this. Their CIO took an active interest. She was very engaged.
and helping to take advantage of new innovations to bring this online shopping experience to their base of customers. The problem was evolution, not adoption. Sears lost this fight, not because they were slow to adopt, but because they did not evolve well. After the dot -com bubble burst, companies like Amazon used this as an opportunity to gain market strength. They acquired, like egghut .com and Alexa, for example, and many more following this,
this time period. Sears had acquisitions as well, but not in e -commerce. They gained more diversity in retail market share, but they were not evolving their online strategy. The story continues. Amazon built massive consumer confidence with the launch of Prime and doubled down on the shopping cart experience. I don't know if you remember the days of buying from Amazon early on, but it wasn't comfortable, but they made it much better.
and they made purchasing easy with a simple look and feel that people began to get used to. Amazon also adopted mobile sales with lightweight purchasing ability from any device. Sears struggled in all these areas and was always playing catch up. The company Sears that had more resources, more money, more customers, a larger catalog, and a great initial investment was soon overwhelmed by the company that had evolved.
Guy Reams (06:52.526)
You can look at many examples like this, like Sears and Kodak. For example, Nokia, Blockbuster Video, Blackberry, and even Toys R Us. All of these had a similar story. They were not behind in adoption, and in most cases, they were ahead of everyone else. I use this as a proof point to explain that the issue with AI is not whether or not companies will adopt it. That is inevitable. The question is whether companies will evolve.
to the new changes that are going to come along the way that leads towards widespread adoption. Thank you.