Time and again, history has shown that technological advances mean that existing structures break down and new ones emerge. Often, this means disrupting business models and entire industries, and AI - especially generative AI - is doing just that.
Beyond the productivity gains of working faster and with more quality when assisted by AI, generative AI is challenging existing business models and enabling new ones.
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However, new business models and disruptions in specific industries don't just happen because of technology. They happen because new technology makes it possible to deliver value to customers and users in new ways. Ways that often get one step closer to the real reason why they use a company's products and services.
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I'll tell you more about that here via:
AI is already creating new business models and phasing out old and outdated ones. But first, let's look at some examples where new technology has resulted in new business models in the past.
At the turn of the millennium, file-sharing service Napster proved that people wanted easy access to the world's music so much that they were willing to break the law and download music for free and illegally via Napster.
Record labels and artists feared that we would no longer be willing to pay for music, which posed a fundamental threat to their primary source of income at the time: album sales.
However, it turned out that what we did not like was buying physical copies of albums as CDs. Music streaming services like Spotify have proven that we prefer to pay for easy access to the world's music rather than download it illegally.
According to Spotify founder Daniel Ek, as of July 24, 2024, it had more than 246 million paying users.
While we are willing to pay for music, new technology has shown the music industry that we prefer a business model and delivery model where we pay a subscription for easy access to the world's music via the Internet rather than a model where we pay for physical copies of individual albums (CDs).