The Busi­ness Op­por­tu­nity of the Cen­tury

Rotman Management Magazine - - NEWS -

In the In­for­ma­tion Age, we have more choices than ever be­fore — which makes choos­ing harder than ever. If you go to your lo­cal store, you can choose from maybe 50,000 books; but of­fers mil­lions. Thank­fully, it also has a ‘model of you’, based on ev­ery­thing you’ve ever done on the site. Ef­fec­tively, this model does your brows­ing for you, and presents you with your own book­shelf, dif­fer­ent from ev­ery­one else’s. has a sim­i­lar model for movies. Th­ese cus­tomer mod­els gen­er­ate 33 per cent of Ama­zon’s rev­enue and 75 per cent of Net­flix’s.

Such mod­els aren’t just for books and movies: in­creas­ingly, they are be­ing cre­ated for ev­ery­thing we con­sume, on­line or off­line. Even uses ma­chine learn­ing to de­cide which goods to stock and where to put them in the store. Ma­chine learn­ing is the new ‘mid­dle­man’ in just about every trans­ac­tion — from prod­ucts to jobs, med­i­cal treat­ments, even re­la­tion­ships. Th­ese days, a third of all mar­riages start out on the In­ter­net, and the match­mak­ers are ma­chine-learn­ing al­go­rithms.

There is one big prob­lem with all of this: each com­pany’s ‘model of you’ is based on its own in­ter­ac­tions with you. As a re­sult, th­ese mod­els are ex­tremely nar­row and in­com­plete. There is a bet­ter way, and it in­volves pool­ing all of the data you gen­er­ate, and from it, cre­at­ing one com­plete, 360-de­gree Model of You.

Think of all the vari­ables that char­ac­ter­ize you, and how they de­pend upon each other. In prin­ci­ple, ma­chine learn­ing can fig­ure out those de­pen­den­cies. As a re­sult, it will soon be able to pre­dict what you need right now, or whether two peo­ple are a good ro­man­tic match — not just based on their pro­files, but on their en­tire lives. It will also be able to pre­dict whether you would en­joy a par­tic­u­lar job at a par­tic­u­lar com­pany, based on ev­ery­thing it knows about you, the job, and the com­pany. And from your vi­tal signs — con­tin­u­ously cap­tured by your smart­phone’s sen­sors — it will be able to pre­dict whether you’re about to have a heart at­tack, and call 911.

If to­day’s mod­els of you — based on only a sliver of your data — are al­ready so valu­able, imag­ine how valu­able such a 360-de­gree Model of You would be?

One day soon, ev­ery­thing that gets bought and sold will be based on th­ese mod­els. Per­sonal mod­els are the ul­ti­mate plat­form, and the world econ­omy will run on them. I don’t think it’s an ex­ag­ger­a­tion to say that this may be the great­est busi­ness op­por­tu­nity in his­tory — and that who­ever pro­vides peo­ple with their per­sonal mod­els will be run­ning the world econ­omy. Not sur­pris­ingly, sev­eral pow­er­ful com­pa­nies are al­ready pur­su­ing this full tilt: has Google Now; has Siri; has Cor­tana; has M; Ama­zon has Echo. And there are oth­ers.

Wouldn’t it be crazy to try to com­pete with th­ese giants? Ac­tu­ally, no. The prob­lem is that each of th­ese com­pa­nies has an ex­ist­ing busi­ness model, and at the end of the day, none of them is com­pat­i­ble with the idea of per­sonal mod­els. The rea­son is sim­ple. Th­ese com­pa­nies have a con­flict of in­ter­est. They want to serve you, but they also want to make money in their own spe­cific ways: Ap­ple by sell­ing you gad­gets, Google by show­ing you ads, and so on. What we re­ally need is a dif­fer­ent kind of com­pany — one that is to your data a bit like your bank is to your money. Your bank stores your money and keeps it safe, but it does more than that: it in­vests it on your be­half. Sim­i­larly, your data bank will store your data, learn and con­tin­u­ally up­date the Model of You and use it to ac­com­plish things for you.

Once you have a per­sonal model, you will be able to tell it that you’re look­ing for a job, and have it in­stantly in­ter­view for all the open po­si­tions that match your spec­i­fi­ca­tions, by in­ter­act­ing at high speed with the mod­els of the em­ploy­ers’ HR de­part­ments. While one copy of your model is do­ing this, an­other can be brows­ing for a new car, ex­haus­tively re­search­ing all the op­tions and hag­gling with car dealer bots, so you don’t have to.

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