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Erik Trautman

Technical entrepreneurship, business strategy and product development

The Virtuous Cycle of AI Products

The Virtuous Cycle of AI Products, also called the "AI Flywheel Effect," 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.

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