Erik Trautman

Entrepreneurship, Business Strategy and Product Development in the Age of AI

What it Means to be AI-Driven

The conversation about Artificial Intelligence has become so muddy lately that it is important to be very clear about what we mean when we say an organization is "using AI" or is "AI driven". This post will clear up those definitions and some of the implications of each classification.

There are three levels at which an organization can adopt artificial intelligence:

  1. AI-Assisted: AI is a technical bolt-on to existing processes, usually through the use of AI-created tools, for example AI assisted sales or team management tools.
  2. AI-Enabled / AI-Augmented: AI is applied to existing processes or product data to make the product or service better or more useful, for example the recommendation engines behind Netflix, Spotify, Amazon, etc. This is often in the form of one or more AI-driven features or products.
  3. AI-Driven: AI is literally the lifesblood of the company or initiative, for example self-driving technologies and the companies providing tools to AI-Assisted companies. This is truly an AI-Driven company.

Each of these cases has different implications from the perspective of the implementing organization.

Read More...


How Artificial Intelligence is Closing the Loop with Better Predictions

Much of the hype around Artificial Intelligence centers on some vague sense that it continuously learns from the world around it so it gets ever-better at performing tasks. In reality, it's important to understand that the core truth underlying this is much simpler and more powerful: AI technologies allow us to make better predictions than we could before.

Despite the simplicity of that fact, it is an enormously powerful building block which enables automation on a scale we've never seen before by disrupting task loops across the information and physical worlds. Understanding it will allow you to better appreciate the kinds of change it can and will drive.

The semiconductor represents a useful analogy for this reduction. Semiconductor technology obviously changed the world but these empires were built on top of a single simple truth: it reduced the cost of arithmetic. That most fundamental use case forms the basis of computing and, at sufficient scale, allows us to do everything we can today.

Read More...


The Virtuous Cycle of AI Products

The Virtuous Cycle of AI Products is one of the most exciting ideas in Artificial Intelligence and it's also incredibly simple. Essentially, when AI technologies are integrated with a product properly, they create a feedback loop where the product continuously improves with use, generating more usage and a better competitive position relative to other products.

It looks like this:

  1. Product gets used, generating data
  2. Data from usage is fed into machine learning (or similar) models
  3. Models improve the product, generating more usage
Context

Any product tends to improve with usage regardless of its underlying technology because a good team will use qualitative feedback and analytics data to bring it closer in line with user needs. This improvement, though, tends to reach an asymptote where additional usage and data no longer provide much marginal insight to the product.

Read More...


When you trust memes

The Entropy of Trust

I'm always amazed that people seem shocked when something they've trusted is usurped for commercial gain. Somehow, in a world that's incredibly dynamic and built on Darwinian evolutions at all levels from single cell organisms up to commercial entities, we still hold onto this naive view that our trust in systems is somehow static.

This is probably because we build our relationship with trust based on our relationships with close friends and family. In most (healthy) cases, this one-to-one trust grows slowly or remains constant over time. A fairly static model for trust is reasonable in this microscopic system.

Unfortunately, we tend to implicitly model the trust we place in third parties and macroscopic communities along similar lines and that simply doesn't reflect reality.

Read More...


Pexels photo 434348

Grit is a Muscle. Train it.

"Inch towards daylight" is one of my favorite mantras from a book I read recently. It also accurately describes how to develop the oft-discussed but seldom mastered skill of Grit.

Grit is generally defined as perseverance in the face of obstacles and/or lack of positive reinforcement. It's the ability to do hard things regardless of whether the environment is supportive, and it's the ability to maintain determination and motivation for long term goals through all the shit work between now and then.

Grit is often and inaccurately presented as an innate characteristic. That gives those who lack it far too convenient an excuse to stop trying or to justify their deficits. In reality, Grit is a muscle that needs to be trained.

In 2017, I ran an Ironman triathlon and sold a challenging service business that I'd bootstrapped through 4 arduous years. I live with a group of highly motivated high achievers who span the world of entrepreneurial and life success -- the collection of their acquisitions, press articles, TED talks and general awesomeness gives me constant awe -- yet they constantly express amazement at the kind of will I'm able to deploy to the fulfillment of a particular goal. Why?

Read More...


Hedgehog diagram professions

The Hedgehog Model for Decision Making

I'm a huge fan of any models that find applicability beyond their intended domains and there are few quite as versatile and useful as The Hedgehog Model.

In his seminal book "Good to Great", Jim Collins examines 1,435 businesses over a period of 40 years in order to answer the question "what separates the good companies from those which make the leap and become great companies?" Over the course of his analysis, he uncovers a variety of factors that drive this distinction but one of the most fundamental concepts he explains is "the Hedgehog".

This idea is based on a fragment attributed to the ancient Greek poet Archilochus which says "a fox knows many things, but a hedgehog one important thing." Both these animals have survived successfully by deploying greatly different strategies. The fox is clever -- she knows a great many things and tends to rely on her intelligence to hunt and survive. The hedgehog is a far simpler creature -- when she is threatened, the hedgehog simply curls up into a ball and points her spines outwards.

Read More...


Cropped ironman triumph

I am Ironman.

At 7:41:10pm On July 29th, 2017 I slowed to a halt, put up my hands and wept. I could barely breathe after the deceleration but didn't care because I'd stepped into the moment I'd visualized 10,000 times and it was every bit as sweet as I'd hoped.

This was a moment to culminate the most difficult challenge I've ever undertaken in the course of my life -- and ever hope to. The Ironman triathlon, commonly known as the most challenging single day sporting event in the world, is something so stupidly crazy that it prompts concerned looks and a whole lot of "why?". No one questions any more if you decide to train for a marathon but this mother of all triathlons is that and more -- a 2.4 mile swim followed by a 112 mile bicycle ride followed by a full 26.2 mile marathon.

This 140.6 mile course is the most challenging thing I could possibly imagine a human being voluntarily doing and that's frankly much of its appeal.

Read More...


Clueless

Micro Resolution: Communication Patterns

A respected friend and academic was speaking about something personal. I wish I could recall what it was but the only thing I can remember about the conversation is how incredibly often she used -- clearly without noticing -- the word "like". It was placeholder, punctuation, and security blanket in one. When this person wrote, I knew, it was clear, eloquent and incisive. When she spoke, she undermined every phrase with disqualifiers, fuzzy words and, of course, "like".

I couldn't help myself... I started counting. She used "like" 13 times in one single sentence. Hearing that broke something in my ability to flow with normal conversation and I began noticing similar things that I never had before. It quickly became apparent how important subtle (and not-so-subtle) communication patterns are in determining a speaker's credibility and impact. A few of these stand out more than the rest.

Read More...


Zyglis trump

Trump, The Long Con and the Great Con

The proper way to start a conversation in San Francisco during the past couple of weeks has been to ask "how are you holding up?" A palpable sense of pain, disbelief and fear has captured the city since the recent and historic upset in the presidential election. To those outside the city this may seem like an excessive comparison, but I honestly haven't felt a sense of shared loss and mourning like this in the 15 years since the national tragedy of 9/11.

I knew this outcome was a possibility, especially given the trends of the previous few weeks and the dangers of voting between such deeply unfavorable candidates. On the trading floor, you have to develop a healthy appreciation for clear signals that "the market" is trending away from what you consider to be "the fundamentals". In this election, it felt like sentiment was divorcing aggressively from fact but, until the very end, it still seemed like the results would be forgotten as just a painful close call.

Read More...


Rocky ii training montage

Those who Challenge

A common saying holds that you are the sum of the five people you spend the most time with. More simply, the people you surround yourself with matter. They are the sounding boards for your ideas and the key forces which shape your growth.

Growth is achieved only when you are challenged. It isn't a single-track process but occurs across four dimensions (which are simply the four dimensions of self):

  1. Physical
  2. Intellectual
  3. Emotional
  4. Spiritual

Most of the challenges you will receive across these dimensions are laid extrinsically by others because it's basically impossible to change a system without some form of external stimulus. People can challenge you via three modalities:

  1. Inspiration: They inspire you by exhibiting a behavior you aspire to enable in yourself.
  2. Collaboration: They offer to work with you towards a shared goal.
  3. Direct Challenge: They lay a gauntlet at your feet and say "show me".

Inspiration is the wind at your back and it's maximized by putting yourself in an environment where you are constantly inspired by the people around you. Moving to San Francisco and choosing to live in a co-op based around the goal of "mutually assured non-complacency" were two big steps towards my doing this and I'm endlessly curious to find people who inspire me, whether they are intellectuals, artists, entrepreneurs, or pretty much anyone living their life fully engaged.

Read More...