AI increases the importance of reputation
Generative AI has grown amazingly fast in capability and scalability. As it permeates through industries my guess is that personal relationships will grow in importance. While it is a powerful tool that can help people build their skills and capabilities, I think it will actually help existing and entrenched players while making it more difficult for new market entrants. They will need to differentiate themselves from low effort offerings to somehow build their reputation.
Two points lead me to this belief:
Unless we have a total societal revolution people will be doing some form of work. I’m interested in what they will be doing, not the part that AI is genuinely good at and takes over.
For many cases, AI can mimic humans but not provide a similar service. Air Canada was forced to follow the policy that their support AI created out of thin air for example [1].
This leads to a situation where buyers of people’s time and effort will be sifting through the market, trying to determine what product is faking human effort and what product is real.
Some years ago, we bought some pot holders from a craft market up in the Bunya mountains. The lady behind the counter seemed lovely, and it was a sunny day in a quaint slower part of the world. Trouble was, we saw identical products at Kmart when we got back home. When you buy hand crafted goods, you’re not buying the physical goods alone, but also the story and the connection; when someone passes off mass produced goods as hand crafted it feels something akin to a lie. Misrepresentation of product offerings is nothing new.
Purchasing analytics, I’m hoping the person who sells me their work is knowledgeable about their work and applies their expertise. If they feed the task into an AI and hand me the results without applied any knowledge then they’re just an expensive input device. But worse, I might not immediately know that the analysis is automated and lacking expertise.
The principle agent problem is not a new thing, how is it solved? Reputation. If I know the maker of custom ceramics, I talk to them about their process and see their studio. If they lie, they will gain a reputation for it over time. If I sell my analytical skills to a client then they can see the work, judge the results and hopefully trust me with more work later.
My prediction is that the importance of reputation will increase. People who have a strong personal brand that is well known in their industry will have an even stronger advantage as unknown players are mixed amongst repackaged AI. Building this reputation has always been a challenge but I predict it will only grow as AI becomes ubiquitous.
If you want a human to do some analytics for you, contact me at Hello@NorthCardinal.com.au and let’s have a chat about how I can take your logistics and operations to the next level. I promise I’m real!
[1] https://www.forbes.com/sites/marisagarcia/2024/02/19/what-air-canada-lost-in-remarkable-lying-ai-chatbot-case/
