| > OpenAI is productizing faster (like Apple did with Xerox PARC's research) what happens in cases like this is a slightly different dynamic what it seems on the surface. Apple, coming of huge success with the Apple ][ using the anemic but cheap 6502 8 bit to build a low-end (compared to Xerox) mass market (compared to Xerox) product, was well positioned to capitalize/productize the next generation of more capable 16/32 bit chips without changing their business model or distribution channel. It's right place right time, plus "easier to improve from the bottom, than downgrade from the top". This idea was identified in a famous McKinsey study of the British motorcycle industry's loss of market share to low cost Japanese competition in the 1960's and 70's. The post WWII Japanese market developed to serve people who needed transportation but could not afford the leading British brands, not to mention autos. Once Japan had a successful motorcycle industry it was natural for them to export inexpensive bikes to Southeast Asia and South Asia. The British companies (Triumph, BSA, Norton) did not make much profit on the cheap bikes, they made their profit on the powerful luxury models, so they abandoned competing in the cheap sectors. But then another force comes into play: if you manufacture a large number of something (there is always more of the cheap things) you get all sorts of manufacturing advantages. If you figure out a way to use achieve sturdy construction with fewer nuts and bolts, you get to save those nickels over many many bikes which makes it worth your effort to be good at that. If 1 out of 100 of your bikes leaks oil, and you sell a million, you get a lot of complaints, and you fix it. (these are called "learning curve advantages", and they tend to be logarithmic, so by being 10x bigger, you get +something better) But who especially wants to buy sturdy, reliable transport (everybody) and is willing to pay a premium for it (rich people in the form of high margins)? So being the largest (and by definition the best) manufacturer of a product leaves you perfectly positioned to be the best high margin luxury supplier. Xerox was not asleep at the switch, they were just not a high volume low cost manufacturer with a presence in the consumer market, at the time when these learning curve manufacturing/marketing ideas had just been developed so they weren't used to thinking that way. Nor was it a case of the suits not listening to the engineers; the engineering ethos at Xerox was not "can we squeeze this on the smallest chip possible", it was "omg let's leverage Moore's law onto even bigger high end chips, compile into microcode!" I know it's popular to hate on MBAs here, but this is an example of what they learn, and why VC's might like to see an MBA on the team, this is the kind of talk they want to see in the business plan rather than an impossible dream. |
From what I've been reading/tinkering, this expertise is essential bc these models are very useful only if the UX paradigms accommodate for them. Getting their hands dirty with consumer-facing applications may keep them a step ahead of Google despite the research 'disadvantage'.