product strategy 101 | core of business & pm skill sets

I want to start a course by very fundamental skill set. We make sure that we align on the principles of what we are discussing. Okay. There will be a

are discussing. Okay. There will be a lot of topics in the future uh including growth, pricing and uh new technology

adoption. But I want the folks to know

adoption. But I want the folks to know what is the basic like problem that we are discussing here. So today we will talk about core business core of business and PM fundamental skill set.

Can anyone tell me what is the core of business? Just use your understanding to

business? Just use your understanding to um like answer the question and feel free to unmute yourself.

>> Increase a revenue reduce cost.

>> Yeah, that's a very typical answer. Who

else?

>> Solving a problem in exchange for something.

>> Yeah, that's uh closer. We could uh start from like talking uh about these companies like what is the business about for uh Walmart? They provide

everyday needs.

>> Correct. At a cheapest price. Right.

>> And what about >> they provide everyday needs via the convenience of the internet.

>> Mhm.

>> Provides everything you need at your doorstep.

>> Yeah.

>> At the first uh making people's life more convenient and better.

>> What about a video? provide computing

for whatever we want to do >> whatever you want to do >> or for at the fastest way possible as well >> because it makes

>> faster every few years >> before the class I told all of you guys that uh our class feel free to use chat GPT or like Google or whatever product that you are using can someone Google

what is the mission of Walmart Amazon and media and tell the class about this >> Walmart is to save people's money so they can live better.

>> Mhm. What about

>> Amazon? Amazon to be Earth's most customer centric company, Earth's best employer and earth safest place to work.

Nvidia to bring superhuman capabilities to every human in every industry. Wow.

I just opened my eyes early on.

I I think uh it's always fascinating for me if you think about what the company does, right? And what is your

does, right? And what is your understanding of the company's mission and then check out what is the official like wording from the company you can sense something you can always sense like what the direction that the company

is going for. Right? That is a very like fascinating piece about diving deeper into business strategy.

Now what about Tik Tok? What do you think about Tik Tok's core business?

>> Make everyone influencer. I don't know.

>> Actually, the vision of Tik Tok is inspire creativity and enrich life. So,

I would say there the core the Tik Tok business is like bring joy to everyone.

>> Yeah. Entertain uh people.

>> She worked there so it's cheating.

>> Um I remember that too. Um I think the the mission for Tik Tok is very interesting, right? Like inspiring

interesting, right? Like inspiring creativity is from the creator side and bring joy to people is from the consumer side. So um you can tell the marketplace

side. So um you can tell the marketplace from their mission. And what about Salesforce?

There's a running joke for Salesforce is nobody knows what Salesforce does. Uh

does anyone know what Salesforce uh do as a company?

They actually help you helping CRM for everything to reach out to your users to solve drop offs everything.

They just help your users complete journeys which you want.

>> That's a very vague description. Um who

else want to try?

>> Because you just want to be the best CRM solver in the world template.

[Music] Can anyone tell us what is the mission for Salesforce?

>> To empower everyone to create the future they want and to build bridges between companies and customers.

>> When you see uh companies describing what they do, what they do, right?

They're not talking about like CRM products and stuff. They're trying to talk about what is the problem that they're solving, right? And uh what about open AI >> using artificial intelligence or

humanity something?

>> Yeah. Can you tell us the mission in their original words?

>> It's open air mission is okay I was right to ensure that artificial general intelligence benefits all of humanity.

>> Yeah. Well the typical mistake that people make will be like oh open AI is about chach right not really uh open AI is about building foundational model not really right you don't talk about the

product you talk about what problem that you're trying to solve. What about

Google? What's the core of business?

>> To make uh information more accessible >> and organized. Yeah, that's um this type of company mission is too familiar for all of you. What about Spotify?

>> To fit your favorite songs in your pocket. I just made that up. Let me look

pocket. I just made that up. Let me look it up.

>> That sounds very made up. Chip says to unlock the potential of human creativity, which is very much like Tik Tok surprisingly.

Oh yeah, it's the same like um to give everyone a voice kind of spiel, but it's like music instead of media.

>> Yeah, because their business is not only about music, right? They have podcast and audiobook and stuff and they want to enable creators uh on their platform and give credits to the creators. What about

Glen? If anyone have heard of this company >> to expand humanly potential to do extraordinary work.

>> Yeah. To make knowledge work for everyone is their mission.

>> What about Coinbase?

>> Allow access to, you know, cryptocurrency for everyone. It's like

Robin Hood but for crypto in the sense of like opening the stock market, decentralize it. Same with uh Coinbase,

decentralize it. Same with uh Coinbase, but it's just like cryptocurrency. So,

if you don't know much about it, you could just go in and do whatever.

>> Now, you very much sounds like a pitch deck for like investors. You are saying it is Robin Hood for crypto. What is the mission for Coinbase?

>> Increase economic freedom in the world >> because they're in their belief crypto is to decentralize the financial system.

They're talking about like economic freedom. Understandable. What about

freedom. Understandable. What about

>> language education?

>> Make language education fun, more fun.

>> That is definitely not true because they're not only doing language. I

believe their mission should be much larger than that. Anybody

>> doing language >> lifelong learning?

>> Lifelong learning. A good guess.

>> Um decompose the pay wall for education.

>> Good guess as well. Now who can tell us the mission for Dolingo, please?

>> To spread the influence of evil ego.

>> That's definitely not it.

I I like believed her too. I was like, "Oh, okay. That's unique."

"Oh, okay. That's unique."

>> Uh the mission is to develop the best education in the world and make it universally available.

>> Yeah.

>> I believe um in one of the lectures from Dolingo CEO, he talked about he wants to uh basically make education more accessible to everybody uh in the world.

The CEO from Dolingo himself from from Guatemala. So a lot of like English test

Guatemala. So a lot of like English test that he did that's why he started from English and language learning a lot of English test that he did a lot of like education opportunities is not fair

around the world so he want to make it more accessible for people >> so has the same mission as like Khan Academy >> now you can see who are the competitors

so uh back to our topic what is the court of business right the court of business as you went through all of the companies you realize that The core of

business is creating values for your users. Okay, this is the one of the

users. Okay, this is the one of the things of the many things that I want you guys to remember at the end of this course and throughout your life. Okay,

whatever product that you're trying to build in big companies or in your startup, creating value is the first thing. If your product doesn't create

thing. If your product doesn't create value for people, it doesn't work at all. The value that you created has to

all. The value that you created has to be more than the cost of creating that value. That's how you have a valid

value. That's how you have a valid business. Okay, this is a very vague way

business. Okay, this is a very vague way of saying this. You could say that, oh, I built the whole Facebook. Well, there

are like 10 people using the fa using Facebook, right? Is not worth the cost

Facebook, right? Is not worth the cost of creating that value yet, but you probably have that equation once you reach like 1 million people, right? So

it is not about at any moment that your the value you created should be more than the cost of creating value but a very vague concept when you think about whether you want to start a business in

that area. Let's use an example right

that area. Let's use an example right let's say right now you're building an AI CEO for the Fortune 500 CEOs. So you

want to build a AI co-pilot for the Fortune 500 CEOs. What you want to do I'm just like making things up right here. If you are actually building an AI

here. If you are actually building an AI CEO and you realize that what I said was wrong, just point me out. What you want to do is maybe to um to enable the CEOs

to send emails to anyone from the same company, right? Either to do like

company, right? Either to do like whatever product reviews or make critical decisions or approve whatever you want to make that happen, right? How

you want to make that happen is to maybe stock all the CEOs, all the written emails that they uh ever have at this company and you want to sound like them. So you

probably want to stock the all the Fortune 500 CEOs 247 to record them to see how they react to certain things and then train your AI model, right? Then it

doesn't sound to me that the value that you create is more than the cost of creating that value, right? because you

need to gather all the data. You need to train the AI model and the value that you create is to draft email for them, right? That doesn't sound sounds right

right? That doesn't sound sounds right for me. And the total addressable market

for me. And the total addressable market for your product is only the 500 people.

So that doesn't sound great. It's just

an example of telling you how do you make sense of your business. Most of the companies when it comes to a situation like this, they're thinking about two things. One thing is you can think

things. One thing is you can think whatever to drive the revenue up. The

second one is drive the cost of goods sold down. The COGS is cost of goods

sold down. The COGS is cost of goods sold. So in this case, let's say right

sold. So in this case, let's say right now you do the math, you realize that the value you create is not enough for cost of creating that value. Now if you

want to drive the revenue up, you could think about, oh, right now every CEO just paid me for $50 per month for this service. what can I do to make it $100

service. what can I do to make it $100 per month right then you probably are thinking about maybe write drafting email is not enough now you want to take over their all hands meeting as well

right they're public speaking then you could put the price up or you are thinking about driving cost of the good selves down for example originally you're thinking about recording them 247

and trying the AI model based on that right right now you probably could think about why should I record you during the eight hours of your deep right I don't need that compute I don't need that storage I don't need to process that

data so I probably just need to process the data of you working right so that is driving the cost of goods source down or you can drive the revenue up by oh

actually I'm not targeting only the 500 people I'm targeting all the CEOs in this world right that could drive your market up so usually how companies do

drive revenue up or drive cost of goods sold down is through new products new market new value. This is the same thing when like we design LinkedIn premium for example uh we define the price for

LinkedIn premium for different skills.

We develop new product new uh targeting new market or deliver new values for members. So what is the cord of business

members. So what is the cord of business hearing the audience who can answer my question please >> create the value create the value create the value.

>> Thank you. So that in the product world is also called job to be done and this is a phrase you will use in your future work uh whenever you are designing a

product right your executive will ask you oh what is the job to be done for for that user when you are working in a startup usually the job to be done is very singular let's say you are like

Google but 20 years or 30 years ago I forgot when Google was founded and the only job to be done is to do search right so you probably just want uh the user to be able to search whatever

information that they're looking for, right? That is your job to be done. You

right? That is your job to be done. You

don't make it like your company mission to like make information more accessible and organized for people because at that time you don't have Google map data. You

don't have like YouTube data. Uh you

don't have all of this data, right? You

are only looking for searching for websites. So at that time your job to be

websites. So at that time your job to be done might just be like oh may allow the users be able to search for whatever website they're looking for. Right? As

your company grow, you probably have more diverse uh audiences that you're targeting. You might have different

targeting. You might have different personas you're targeting. For different

personas, your job to be done might be different. Like if you're a product

different. Like if you're a product manager on Google search, there will be like even more um detailed uh audience segmentation. For example, you can see

segmentation. For example, you can see like knowledge based uh searching or like oh you want to search for shopping stuff. Uh it will be very different

stuff. Uh it will be very different audiences. But let's just make this

audiences. But let's just make this question simpler. For Google search

question simpler. For Google search audiences, you might still be like, oh, looking for whatever website that you might find helpful. On Google Map, your audience will be different, right? You

probably want to help that person to navigate and they're probably just lost in a new city or it is not about traveling to a new city. You might just want to look at your daily commute,

right? And then that use case is

right? And then that use case is different uh because you want to maybe calculate whatever transport uh is the best way for you to get to your office.

So when the company grow the job to be done will vary uh based on what audience you're targeting and what pain points they have. Every single piece of

they have. Every single piece of strategy framework that we're learning throughout this course is to make sure that you have a growing market. The

frameworks are only tools and I want you guys to do your homework to do your research to reach out to people to get whatever information is needed and

utilize that framework to come to your conclusion. This is how you do a

conclusion. This is how you do a strategy analysis. You have the

strategy analysis. You have the framework is only your tool. you get the information you need and then you come to a conclusion that will inform you where the direction your product is

heading to.

>> I was just wondering so like I guess at the early stage like how do you know like I guess the market you're targeting will actually be growing or like will

actually have the potential of growing.

>> Uh data is extremely important in industry analysis. Um for example, let's

industry analysis. Um for example, let's say uh you are doing character AI, right? You want to find character AI and

right? You want to find character AI and you are thinking whether it will be a thing for users to talk with AI personas.

How do you know about this?

You can think about oh communication is a whole thing right communication is a whole industry and it depends on the form of communication. Right? Now we're

talking about a market not an industry.

Industry will never grow. That is a later thing that I will talk about. But

market is something that you want to target. So um you could probably see oh

target. So um you could probably see oh are the humanbased social media are growing right you can get this data through maybe Tik Tok LinkedIn meta

whatever all the major social media you could think about like the growth rate of these companies right usually the growth rate is uh meta has this growth

legend of having 10% of growth every year which is extremely hard to achieve then 10% is a pretty high uh percentage For most of the social media companies, Tik Tok might be slightly higher. But

then you look at, let's say, AI based communication, right? Let's say how many

communication, right? Let's say how many people talk with chatbot. Uh you

probably also have a data to that and you have a year-over-year growth. Uh

whether that growth is higher than the human based social media, right? Then

you have a sense of oh is that a new format that I should invest in. So

that's usually the uh the type of marketing analysis that I am looking for from your future reports. Some of the other thinking for example traditional gas based cars versus the electric

vehicles right you could also look at the sales or adoption uh between gas and electric vehicles how many cars sold uh in that uh those companies how many cars sold in electric companies and then have

the comparison of what is the future heading I saw your question in the chat saying uh when we talk about social media whether we're talking about DAO or revenue I would prefer DAO over revenue

because you are targeting user behavior when you like start a new company in the um in this case character AI right revenue I think it is very

squeezable for example most of the social media today right we have enterprise customers we have consumer customers consumer customers usually pay through subscription enterprise

customers uh usually pay through ads or whatever services right like in LinkedIn case they post jobs or like they have like sales people they have recruited accounts and on consumer side you can also increase the price or you can do

whatever to increase the growth uh if there is any scribble exquisible market uh in your monetization um I would look at that over revenue >> I have a question about the uh

definition of strategy so by strategy do you mean like a higher level company strategy or like very down to earth um product strategy or like go to market strategy

>> question that we are discussing here are very high level business strategy for companies In real life, your product strategy go with business strategy. It

just depends on how detailed your scope is. For each scope, you probably have

is. For each scope, you probably have your own nuances. For example, right, let's say LinkedIn as a whole company, we move to AI, right? We do AI agents.

We do whatever AI, right? But in my product scope, whether AI makes sense to me is another thing. I also want to do AI, but probably it's not the current problem right now, right? for my problem

maybe one or two years ago my problem is there are too many war rooms right so I need to improve the stability of the tech stack and make sure there is as less war rooms as possible right so for

my product uh scope there might be a different strategy back then >> so as a product manager I have to think in more terms of you know business lens is it what my company needs or do it

does not make conflict with what my user needs >> I know it's a basic question but it just crossed my mind.

>> Um I would think and also a lot of product managers will tell you users first.

um users will definitely be the first that you should think about in terms of company strategy or like what company needs right

from my own experience as well I think it is always going to end up in a failure situation if you're trying to force something on your users

if your users are trying to do something they're going to do it anyways right if your users are not going to find your product to do something that they want they're going to find some other product to do the things that they want. You're

not going to teach your users a lesson in life. Okay? They're not listening to

in life. Okay? They're not listening to you, LinkedIn, to teach them a lesson.

So, you have to follow what users need uh in their life and build product for them. Whether it is against your company

them. Whether it is against your company strategy, let's say Google, okay? Um so,

all of you guys talk about Google's mission is to make the information more accessible and organized, right? And

right now I'm a monetization Google product manager. I'm thinking I don't

product manager. I'm thinking I don't have enough ads revenue this quarter. So

what if I put more ads on the top, right? And not making the borals

right? And not making the borals information more organized. Um I'm just like pushing all the other links down.

This will go against the company strategy, right? So usually how it

strategy, right? So usually how it works, if anyone watching this recording working at Google search, please keep me honest. Um so usually how it works is

honest. Um so usually how it works is there will be a calculator within these teams right so you pro you want to put that ass up but whether that

ass is is useful is a question that you want to discuss right if it if it is useful information and users can benefit from clicking into that link it is fine it is asked right so there has to be

multiple metrics to define whether it is useful for users uh for example some of the typical um metrics the click-through rate Right? And the bounce rate uh how

rate Right? And the bounce rate uh how many people click into that and bounce back uh and the dwell time they spend on that website right and also whether they are searching for similar topics after that uh basically meaning that they

didn't find the good results in the previous re uh previous search right there are so many metrics and there will be a calculator uh so usually when you have a experiment you just input all the

data and there will be a calculator saying yes or no uh and that's how the companies manage their principle if you are going against the company strategy

and doing whatever the users want or like benefit your business, your company is trying to stop you from launching.

But when you decide a product to build or not, the members need first because if members need is not there, you're not going to have sustainable business anyways.

>> Thank you very >> to define your product strategy, there are usually three components. The first

one is industry analysis. So you want to make sure that you know what industry you're playing in and that's how you starting to notice like who are the

competitors. So the first one the

competitors. So the first one the industry analysis whether the industry is like having any outside new events happening that you might want to be aware of. Um what is the industry

aware of. Um what is the industry funding overall whether um the government or like the economy is favoring this industry right now. Um

this is the industry analysis that you want to gather all the datas to give you a basic understanding of the industry.

The second one is company analysis.

Company analysis is usually for your company. I saw some of you guys uh put

company. I saw some of you guys uh put into your one pager strategy analysis to talk about like your uh strength and weaknesses. That's company

strategy. Uh that's company uh analysis.

uh basically understanding where your company is at and uh what are your experience weaknesses, what are your advantages um and what are the things

that you could le leverage right uh for example meta right meta is throwing $100 million uh to AI researchers uh as sign

sign on bonus that maybe from their company analysis they could say that huh having a lot of cash is our advantage lack of talent is our weakness so why don't we pay the AI add researchers $100

million as their sign up bonus. The

third one is competitive analysis. Uh so

you identify the industry, you identify your own strength and leverages and then you want to think about what are the competitors out there and what is your advantage compared with your competitors

and how you can win the competition.

This whole course was inspired by my Duke professor Greg Copper and this is the picture that I stole from his slide.

All the little spots on this graph is a new strategy framework uh that got launched. So you can tell that from the

launched. So you can tell that from the late uh 1950s we started to talk about business. We started to think about what

business. We started to think about what kind of frameworks could make sure that a business is successful, right? How do

you think about your business? Uh at

that time also the industry is for example oil and gas industry different industry than the industry that we are dealing with. Um and then you see in the

dealing with. Um and then you see in the late 1980s and early uh and 1990s there will be like there is a a a distribution of different types of strategy

frameworks right there is no single strategy framework that could cover all the industries and all the companies uh if it is like let's say what analysis right you can tell from I think I have a

graph later yes one analysis exist in the middle of 1960s like if you guys can see this yeah and so The analysis itself is very limited but it could cover a lot

of businesses. That's the strength and

of businesses. That's the strength and weaknesses of this uh SWAT of this framework. And of 1980s that's when we

framework. And of 1980s that's when we started to have internet industries and then there will be like more diverse uh happened uh to define what part of the

industry that you are playing. uh

whether your company is shaping the industry, whether your company is a visionary, whether your company is a renewal, is adaptive or you're a classical company, right? You play your

strategy differently. And these are all

strategy differently. And these are all the topics um that we are going to cover uh throughout this course. I would make sure that um try my best to cover as much as possible. This is one of the

reasons why I started this course is because I realized looking through a lot of MBA courses, a lot of like MSPM courses, uh a lot of engineering

management programs, they might have business courses or they have might have strategy courses, but none of them covered such a wide spread of all the frameworks uh that you could use in

thinking your strategy. over the years you might forget to use forget about a lot of frameworks which is fine but how you think uh is trained during this the

whole course. So this is a timeline of

whole course. So this is a timeline of like different like strategy frameworks.

So uh around the 1970s or before 1970s it is more fun uh foundational uh framework like the SWAT analysis that we talk about right uh every company can use it they have a very high coverage of

all the businesses uh it's very fundamental and then from 1980s 1990s there is a new technologydriven adoption uh framework now at that time the

question is oh when there is a new technology come up how can you make sure that your users adopt your technology right right now when AI come out AI is

not a new word. So these days when when you look at chbt or other AI products right they are LM based products the adoption rate is way faster right it is not the time that oh internet is just

first came out or Facebook first came out the adoption cycle is not as fast as today's product AI is not a new word and also as time passed by the generations over generations are more open to

adopting new technology and then from the early 2000 we're talking about customer centry uh centric right reason being that the technology is becoming more and more consumer-based and then

after 2010 uh we are talking about speed and scale as a business how can you speed and scale and compete with other products and companies right so you can tell that at different stage of the

history we are focusing on different things that is where the disruption come from because technology becomes more popularized among consumers

and this is also a slide that I stole from his slide uh which is very Funny because uh when he was a professor back then uh he used to

have this LinkedIn profile headline saying I read all the business books so you don't have to like that is basically the principle when he started this course he read through all the books and

then he uh come up with this competitive strategy uh course so we don't need to read all the business books uh books and then I remember at the end of the

semester I told him that actually I finish all the business books. So I

don't need you right now. Um so I started um actually reading uh from crossing the chasm and this is still I think uh one of the best business books

out there. I did find a lot of

out there. I did find a lot of inspiration from for example the lean startup the innovator's dilemma. Like

these books are also pretty good. Uh but

crossing the chasm is the first business book that I read that I feel like oh actually business strategy book is not just cliche. So crossing the chasm

just cliche. So crossing the chasm filled my gap and fill my like understanding gap. So after reading

understanding gap. So after reading crossing chasm I just started to read like inside the tornado uh blue ocean strategy blue ocean shift all the other books. So from the industry analysis

books. So from the industry analysis there are three things that I want to talk about here and I want you guys to remember uh as much as possible uh those things. So these days I'm like going

things. So these days I'm like going through uh all the uh all the stuff that I studied before and I realized that these things are still very applicable

uh to like the technology industry or the AI uh dynamics today. First there is no such thing as a growth uh industry. I

said there is a growing market but there is never a growing industry and I will uh tell you why later. And second your product is not your business. We talked

about this before, right? When we talk about the core of your business, it is not your product, it's what your users need, right? It is also the of course

need, right? It is also the of course the third part uh focus on customers need, not your capabilities. This has

always been like a very um common failure for product managers. You are

obsessed with your solution. You're

obsessed with your product, not your customers. Instead, you should be

customers. Instead, you should be obsessed with the problem that you're trying to solve, not your product. very

common beliefs. The first one population the market will continue to grow. There

is no significant substitute for our product. We can be more efficient and

product. We can be more efficient and boost product uh production and lower cost. Fourth, a focus on improving the

cost. Fourth, a focus on improving the technology and product will ensure future growth. These are the four very

future growth. These are the four very common beliefs and always put companies into failures. So I'll tell you why. Why

into failures. So I'll tell you why. Why

industry is never growing. For example,

you talk about like companies, oh you're in the oil business. No, you're not in the Yes, you are in the oil business, but the whole industry is energy industry, right? You're in the railroad

industry, right? You're in the railroad business, but what you're trying to solve is how to get people or goods from one point to the other, right? That is

the transport transportation industry.

When you're thinking about you're dealing with film industry, you're actually dealing about entertainment. Uh

you are getting attention, getting time, making users feel entertained with all the other products out there, right?

People don't need to just be entertained through movies. They could also get

through movies. They could also get entertained through in uh through music, through art, through any other stuff, through short videos, right? Should

social media, right? So all of these uh products or all of these businesses exist in the same industry and that industry is pretty much fixed based on how much need that the common population

have within that industry. You have a certain amount of like money or attention or time spent in transportations, right? and you have

transportations, right? and you have that need and that need is pretty much fixed but the business within the industry is going to vary a lot. Maybe

some of the business might disappear after a few years because of new technology. Um but the industry defines

technology. Um but the industry defines the consumer need.

>> So you're saying we're not like creating user needs out of thin air. Basically

>> we're not creating user need. Yes. I

>> also have a similar question how we define the industry like we can see energy is a level of industry. So that

makes sense. But we can also see like renewable energy industry.

>> That's a way of people using the word.

Uh but we start this argument because I want you guys to think about this problem differently because a lot of like startups specifically they're going to say that oh the industry is growing.

Um you have to think about what exactly is the in industry that you play in because that is a very common lie uh from startups. Uh another um example for

from startups. Uh another um example for you is communication right before social media you still communicate with other people like you talk and you meet people

it's just the social media enable you to have new format of m meeting new people around the world right now you have a new way to communicate and connect with

more people. It is true that you will

more people. It is true that you will connect with new people that you never imagined in your previous life, right?

But the need is always there. Another um

uh example is if you have spent more time communicating with the AI avatar, then you connecting with a real human being and you talking offline with other

people is going to shrink. People's need

barely change. It's just you always innovate uh on the format. So you make impossible things before possible and that is a growing market right because

you are competing with other market >> but if you don't have that industry or you're like trying to invent a youer good luck with that >> can we summarize it as like um we're not

creating need but we just creating more ways to meet a need that's already there >> I think that is the thing that I want

you guys to get used you >> um could you please share more example of like how we convert the already already there needs um into a model

format. So I have this question because

format. So I have this question because I I was thinking about like social media sharing function. Um I I think before

sharing function. Um I I think before social media sharing like the wechathat moments or Instagram people don't share

that much digitally but they may share um they may share like just by mouth or just by interacting with people in

person. But I was wondering like how how

person. But I was wondering like how how can how can we know we are not creating more needs for sharing.

>> You always want to share because if you don't want to share you won't share when the capability is there. Let's use an another example before Google map right

you can't say that oh I just don't get to the places I want to go to. Yes you

don't have a way to go to the places that you want to go to. But if you really want to go there, you can still use paper maps or other formats, right?

It's just very hard. Google map is making this process easier for you. So

it make it possible for you to achieve what you want to achieve. But a regional need of achieving that goal never change. Another example, right? They

change. Another example, right? They

always say that like social media is trying to get your attention, right?

Using whatever um methods they have. The

more time you spend on social media, the less time you will spend, let's say on cable, TV or whatever, right? Because

your time of getting entertained is just like that much. Um, the more time you spend on Tik Tok, the less time you watch TV shows, right? Um, or less time

playing with your friends. So

it's just your need is that is that much um whether how you are going to play within that market >> industry is not growing means need is

the same market is growing means to satisfy the need the different channels are growing or competing at

I guess it's fundamental yes >> because if you think that you could create user demand that is a ben very dangerous thought

and a lot of startups might say that or iPhone might say that but uh that's not true because you can't think about like

you can't start a new business by thinking about this. You have to start a business thinking about how can you make

this like industry more efficient to um to satisfy more user needs, right? uh

because the current industry is not pro productive enough to satisfy all the user need. What cost the end of uh codec

user need. What cost the end of uh codec >> the digital camera >> camera on phone >> the industry is like pe people u

memorizing through like photos right so they can still do that and the whole industry is still there it's just there is a different technology enabling different formats of satisfying the

user's need and the the second one >> Netflix >> the next one what cost the end of taxi >> Uber energy companies See, >> now we have more controversial

questions. What will and across the end

questions. What will and across the end of Google >> people just having AI assistants and asking them questions instead of searching stuff up >> open AI?

>> Um I think probably the economic unsustainability because it's very expensive to train like LMS and like many companies they they're like

competing on like training their own models. So I feel like um open AI might

models. So I feel like um open AI might be failed to like monetize from their like early adopters and their users. I

guess probably when like AI is not something that people have ha have to pay to access. Uh so like during that

days uh they like they cost so much to train the models but people uh they have like many ways to access AI. They don't

have to like uh access AI through open AAI service.

>> Yeah. Now we are talking I think that those are really good points. Now we're

talking about company analysis.

All the strategy uh ties to resolve the same problem. Tension between two

same problem. Tension between two conflicting business realities. The

reality one is advantage is transcendent. Reality two is corporate

transcendent. Reality two is corporate identity is slow to change. It is an essential element of competit competitive advantage. Uh that is the

competitive advantage. Uh that is the previous point that I was making um about corporate identity. Um usually

when we talk about like oh this company is this culture it's very hard to change a company culture like very efficiently maybe in three to five years unefficiently maybe take decades to

change a corporate identity um which I till today I still find it very fascinating to believe um back then when I heard about this I was like come on if there is a strong minded leadership

they're going to change corporate identity but then I realized it's not it's not really that easy Everything started with why and very few organizations know why they do what they

do and why is not about making money.

That's a result. It's a purpose, cause or or believe. It is the very reason your organization exists. Previously we

talked about the core of business, right? Uh you guys look through uh the

right? Uh you guys look through uh the mission of all the companies that is why they do what they do right now, right?

Um today LinkedIn is a business because we have been trying to make professionals more successful and productive. Um Google is still a

productive. Um Google is still a business today because they are trying to make the world's information more organized and accessible to everyone.

And then how is uh some of the organization know how they do it. Uh

these are the things that make them special or set them apart from their competition. So how is how can you stand

competition. So how is how can you stand out from your competition and what is uh what you built and these are the product that you sell and the services you

offer. Three layers of the problem um to

offer. Three layers of the problem um to reflect why, how and what it is reputation, distinguish features and commodity. Walmart was offering

commodity. Walmart was offering commodity, right? They're making things

commodity, right? They're making things accessible for people. But what is the distingu dist distinguishing features is they're trying to make the price the

lowest among all the grocery stores and then they build up the reputation. Let's

say I'm just making this things up this thing up is like they want to make uh this grocery is stuff like accessible and affordable to the public uh to the massive population right that is a

reputation you build that is the vision that you create. So these are the multiple layers of a company. it is

easier to go from reputation to commodity. Let's use Tesla as an

commodity. Let's use Tesla as an example. When Tesla first started,

example. When Tesla first started, right, they're doing like electric cars.

Uh back then, electric car is not possible in this industry. And they're

starting saying, "Oh, we want to like make electric cars. We want to like make the the world sustainable." They build the rosters, right? They built the fastest car in the electric world.

They're competing with uh Ferrari, right? in spinning in racing cars. So

right? in spinning in racing cars. So

they built that product to build up their reputation and then they were like, "Oh, I'm going to make the process product more accessible for people." So

they built Model S, Model X and Model 3 to get access to the massive market. So

it's easier to go from uh top to bottom.

It is harder to start from commodity to the top to reputation. For example, like the Walmart example, right? Why I'm

saying that the reputation is something I made up? because I'm not sure it is in their mission. Um they haven't really

their mission. Um they haven't really talk about like oh the like um the price of like consumer goods today is so expensive I'm going to democratize the whole thing. No, that's not their

whole thing. No, that's not their mission. I make that things up. Why?

mission. I make that things up. Why?

Because they don't really have a reputation of whatever thing that they're building. Uh they are a

they're building. Uh they are a commodity. They might have

commodity. They might have distinguishing feature but it's very hard for like people for companies to go to the reputation. Can you go over the difference again between distinguishing

feature and commodity? when chat GPT first started um and it accessible to everybody chat GPT is the only uh chatbot that we have right and it claimed back then 3.5 it just come up

with like random answers might not be true but people were amazed by this interaction right that is starting from reputation but now with all the

companies like rushing in um this field they're slowly become like commodity right because everybody has a model that like consumers can use right now if

you're saying that oh what is the difference between open AI models versus cloud versus gemini they have to create the really distinguishing features to make it to the top right so let's say

previously people are laughing at Gemini they were like ah your model is not good Google have been working on AI for decades why are you so bad right that's why sonar pai have been like laying off

people so much and investing in AI AI is all they say right in IO conference uh and now what actually make the difference is when V3 come out

right V3 is at a level at a capability that no other video generation models can do. So they create their

can do. So they create their distinguished features and now they can shoot to reputation. You're staying on commodity. You're basically doing like

commodity. You're basically doing like price rates with other competitors. You

basically like whatever can cover your cost of goods sold you just offer a little bit margin and you kill the other people based on your margin right and if you provide distinguishing feature

that's when the the consumer realize that you can offer whatever the other companies cannot offer and that make you to the top of reputation started from reputation and right now they're trying

to make themsel not a commodity. When

people buy commodity, they think about price. They think about the value you

price. They think about the value you create, right? They think about whether

create, right? They think about whether it is worth it. When you start from reputation, people's decisions are usually more emotional than practical.

What about Toyota?

Where do you think Toyota land?

>> Uh distinguishing features has a reputation of like being extremely reliable. It like Honda

reliable. It like Honda And they're also somewhat cheap. So

either commodity or distinguishing features, but I'd place my bets with distinguishing features.

>> What about uh Coke?

>> Coke is 100% commodity.

>> I think it's 100% reputation.

>> Yeah.

>> Yeah. I reputation,

>> but other things existed that were like Coke before Coca-Cola now.

>> I think Coke itself is like commodity, but Coca-Cola um is not. But Coca-Cola had a distinguishing taste, right? And that

taste was their feature.

>> No, I I could agree with this. It

started a reputation, but I don't think it went down to like commodity or distinguishing feature just because if you go to any like, you know, foreign country, like in the Middle East,

there's like 500 like Coca-Cola ripoffs and they're all like half the price, but people will still buy like a Coke even though they taste the exact same.

>> So, you're saying it's a >> Yeah. Yeah, I I agree. I change

>> Yeah. Yeah, I I agree. I change

>> uh weird knowledge I have and share it with you guys. Um Hamza just said the Coke is the first Coke and also um they just keep innovating,

right? Different industry have different

right? Different industry have different ways of innovation. Um and for example, like one interesting story I know is do you know why they just highlight the

polar bear so much in their advertising?

uh because they are the first company to discover how to give you a cold drink back in the days.

It's interesting like back in the days the ice is so expensive. It is such a luxury to have cold drink and that's why they like advertised the polar bear everywhere because they said they like

able to make cold drinks and they're going to make you give you a refreshing experience. They started using dry ice.

experience. They started using dry ice.

Before it was a luxury for factories.

>> Uh must see this >> glass. They have a reputation. Glass it

>> glass. They have a reputation. Glass it

come hands down.

>> Target.

>> Distinguishing features cuz Target is not cheap.

>> See, I thought so initially, but I'm trying to think of distinguishing features and I can't really think of any.

Well, I think it probably just like fill the blank of the market that like people need um this tier of um department stores. So like they can

get like quality assurance good.

>> Oh, so there's like they cater to like the the upper middle class and therefore that's a distinguishing feature because they fill that hole. Yeah, I'm still second.

I feel like Target has no actual edge in anything. I my sister worked there for

anything. I my sister worked there for like a year in high school. So

professional.

>> I feel like my my personal opinion is Target started from reputation. Uh like

what uh Lexin said, they were trying to say that oh we have like more guarantee on the product quality but then there are too many grocery stores doing that and they're just like more and more high-end compared with Target. U and now

Target is like struggling with their competitive edge. Like these day there

competitive edge. Like these day there are more like ways of playing around with it. You can say that you're like

with it. You can say that you're like organic like Whole Foods or you can say that oh like we just like way high-end like products. We don't even have the

like products. We don't even have the Whole Foods um like cheaper product like there are so many grocery stores uh like this these days and it's crazy how much

they can differentiate from each other.

Um >> don't hate on Whole Foods. That's like

my my favorite store. I love Whole Foods.

>> Well, you are definitely upper middle class. least there is there is a Whole

class. least there is there is a Whole Food on the market street in San Francisco and on the other side of the street like exactly the opposite of Whole Food is a Safeway and a lot of

times they sell the same stuff. Okay,

I'm still confused about this. They come

come on they sell the same stuff and a lot of times Safeway have better strawberries than Whole Foods. Um

they're sweeter and obviously Whole Foods can always say that oh we're organic. Yeah, that's a good sell. But

organic. Yeah, that's a good sell. But

nowadays I feel like San Francisco people are also say always saying that oh that's just like one crossing street one side is poor people shopping the

other side is rich people shopping and they just like definitely play the image into consumer's heart like you don't you don't you can't really tell the difference but it's the image that make

you feel like oh I feel richer going to Whole Foods.

>> They're totally strengths and weaknesses. At university, I live next

weaknesses. At university, I live next to a Costco, a Trader Joe's, and a Whole Foods. They're like all right, like

Foods. They're like all right, like walking distance away. And you know, I go to Whole Foods for like they have really cool beef sticks I'm a huge fan of. They're called Chomps. Love them. I

of. They're called Chomps. Love them. I

go to Costco for like bulk supply. I go

to Trader Joe's for their like yogurt cups. Like they each have things that

cups. Like they each have things that make them perfect and beautiful the way they are.

>> Yeah. But it's interesting that they are trying to advertise themselves into certain user segments and make you feel different when you go to those stores.

>> Yeah, true, true. I They're all like the same. They just have different cool

same. They just have different cool stuff.

>> Yeah. I remember previously there's a pre uh like previous Whole Foods employee exposing Whole Foods saying like, "Oh, you guys think that all the bread that you guys purchase from Whole

Foods feel warm?" No, they're not made on the the exact date. They're made like a week ago. We just rewormed them those.

But like you never like thought about that going to Whole Foods. You just

think that you have a premium customer service going to Whole Foods. Starbucks

reputation. Weren't they like the people who uh I guess made famous the like $5 cup of coffee like to go? Like oh just stop by, get a

cup of coffee to go. Only five bucks.

So you're saying they started from reputation?

>> Yes.

>> Any other thoughts?

>> The thing is reputation. I think they created uh like lifestyle revolution of >> like you have a chill time staying in a

coffee shop. Um and they want to bring

coffee shop. Um and they want to bring that space all over the world. So I

think that it's reputation. you go to Starbucks to experience a coffee, not have it. So

have it. So >> yeah, the Starbucks CEO is going to be so happy with all of you guys saying so is the Starbucks stock just like keeps declining over the years because there

are too many competitions in this in that field and like the other coffee shops just always have new stuff coming up. Uh new innovations, better coffees,

up. Uh new innovations, better coffees, better beans. They're saying we are

better beans. They're saying we are fancier.

>> Yeah, I think it started at reputation but I think it went down.

Yeah, >> like started reputation. Now it's

probably at like No, I'd say distinguishing feature just because they have what's it called? Um like

drive-throughs and stuff in comparison to what other places sell coffee with drive-throughs like McDonald's, >> Tik Tok.

>> It started off a reputation and now everyone's kind of copying them. Even

like LinkedIn has reals. So I think it's going down to distinguishing features. I

don't think it's that like commodity just because Tik Tok's always just like making random new stuff. So I'd say around distinguishing features. Okay. Um

I think that so you said um Tik Tok went down to distinguishing features because all companies are like copying shorts or reals or whatsoever. But I feel like Tik

Tok still stays at reputation because even though there are like so many shorts in on different platforms, Tik Tok is still like on its own.

>> But like what distinguishes them, right?

Because if I have like um see I haven't been on Tik Tok in a long time because I think Tik Tok's algorithm is like worse than Instagram's but I'm on reels like all the time. All my friends are on

Instagram reels and and they both have the same stuff. The only difference is Instagram I mean Tik Tok has just more users. I'm not I'm not saying that Tik

users. I'm not I'm not saying that Tik Tok's reputation is like worse than Instagram's. I'm just saying that both

Instagram's. I'm just saying that both of them have really large reputations and they both basically do the same thing now to the point where like I wouldn't consider Tik Tok doing

anything really innovative.

And so when I think Tik Tok, I'm not like, "Oh wow, what they're doing is so cool and new versus, you know, every other company that just like copied them and is doing very similar stuff." And

they also pay their creators less. So if

anything, >> well, but like you would say Coca-Cola is reputation, right? What's the

difference between Coca-Cola and Pepsi then? But Coca-Cola is still reputation.

then? But Coca-Cola is still reputation.

Okay, don't beat me up if you're going to say Pepsi is different from Coca-Cola.

>> No, no, that's a good point because uh No, you're you're right because it's like extremely it's the same. It's just the reputation just got

same. It's just the reputation just got carried. But the thing is I don't think

carried. But the thing is I don't think like I feel a lot of people use Instagram for the same thing. Like I

don't think reals is like an unused feature versus Coca-Cola where people obviously prefer a Coca-Cola versus a random like I don't know like Pepsi for some reason. Like a lot of people use

some reason. Like a lot of people use Instagram reels over Tik Tok just because they're on Instagram all the time and then it's just so close versus going on Tik Tok. But at the same time Tik Tok has a big user base. I just

don't think something will make me go to Tik Tok over the other thing except for maybe like a better algorithm. I am uh so Tik Tok is banned in India but Tik Tok gives an opportunity for a small

creator to get big right Instagram you have to spend money like I guess everyone who have worked in social media >> maybe uh like small creators make way more money on Instagram and even if

people do well on Tik Tok they go to Instagram anyway just because they make more money that's why you always go on Instagram accounts and you see like I have 50,000 people on Tik Tok you know

trying out Instagram XYZ like they're not it's It's not like a Coca-Cola versus a random, you know, like Middle Eastern Coke company. It's like Tik Tok versus Instagram. And Instagram's like a

versus Instagram. And Instagram's like a giant and it just copied them. So, it's

like the same thing. So, if there was like Coca-Cola Premium, not even Coca-Cola, if it was like what's a big drink? If it was like Water Co. and

drink? If it was like Water Co. and

Water Co. started copying Coca-Cola, like I I wouldn't be like, "Oh, Coca-Cola still has a huge reputation."

Because Water Co is a huge company. It's

doing the same thing now. I think from my uh standpoint I think Tik Tok definitely start as a reputation not because of like initial like the first player or whatever. Um I think Tik Tok

started as a reputation because there just so much creativity happened on Tik Tok. Uh if you think about back in the

Tok. Uh if you think about back in the days that people just dance on Tik Tok and Tik Tok always start with like new trends right like new this new that new filter right try it out. just over the

years that Tik Tok content becoming more and more generalized and people just send all kinds of content on Tik Tok and now they cannot distinguish themselves because it's not always just like trying

out new trend trying out new filters and stuff. Uh you can see those trends on

stuff. Uh you can see those trends on reals too because people still download the video on Tik Tok and send it on reals because reals do uh have a better monetization for early users. Whimo

>> I say reputation and I know Uber is coming in but Whimo just kind of has like they already have fleets in place.

They already have um so much data from the um all their trials. They have all these deals with certain cities that Tesla doesn't have. So that's why I put

them at reputation and I maybe Tesla will bring them down to distinguishing features but I don't think it happened yet. I think Whimo is in the stage of

yet. I think Whimo is in the stage of reputation temporarily. But when c when

reputation temporarily. But when c when customer choose uh the taxes they also compare the price when more and more

companies uh enter the this uh like market. I think it will like climb down

market. I think it will like climb down to the like distinguishing features or

even uh come murder. For now, it's only distinguishing features because for one, the scale like it's not popularized or

it's not spread out as um wide as Uber and second um I think for now, okay, this is heristics, but um I don't think

for now there's reasons for me to like absolutely choose Whimo over Uber, you know, like I would choose based on the price. Like

price. Like >> I think Whimo will face a distinguishing feature problem uh after new players coming in, Tesla is coming in um and Zuks is coming in right uh if all of

them have similar cars, they have similar capabilities. Uh cruise is done

similar capabilities. Uh cruise is done because cruise is not safe but like uh you can't just like saying that you are the safest like auton autonomous driving

is not enough later. Um you have to adding more uh values to distinguish yourself. So yeah over the time all

yourself. So yeah over the time all distinguishing features that matter to your customers will become part of commodity level offering. Um in other words they become the basis of competition. They add to the cost of the

competition. They add to the cost of the offering but no longer command a premium price. And I I realize some of the some

price. And I I realize some of the some of you might already realize when we are discussing all the companies which layer they're in um you realize oh they started from reputation right but then

all the distinguishing feature becoming commodity level now you have to always have consistent uh innovation to put you back to reputation. So yeah this is a um example that I want to talk about openly

I started from reputation but then when DEPC came out people were just realized oh do I really need to spend that much money to train a model uh and now model is becoming a commodity and they have to

think about distinguishing features to make them at the top of the um reputation. So we previously talked

reputation. So we previously talked about um the five different layers of the strategy if you guys remember like over the history of strategy frameworks.

Um this is also the different attitude or different um segments where companies put themselves when a new technology or like a new environment comes up. There

are companies who are classic uh who are like big right I can't predict the future but I can't change it either like I'm just like trying to be bigger companies doing whatever I am doing

right now there are also companies being adaptive um I can't predict the future and I can't change it but I can adapt to it right uh a lot of big companies today

with their AI strategy is very adaptive um they're not predicting the future per se but they are looking at whatever ever format or whatever new types of interaction is more successful than they

expected they will adapt to it right and then there is the layer of shaping I can't predict it but I can change it so uh companies like Nvidia is one of the

companies in the AI uh era that they're not really predicting the future we're predicting the future human uh like machine interaction right but they are shaping it by supporting it or they have

visionaries I can predict it and I can change it. These are mostly the startups

change it. These are mostly the startups experimenting with new things, right?

OpenAI was one of them and now there are numerous AI AI startups trying to predict uh or change the existing industries. They're trying to change how

industries. They're trying to change how we uh use lawyers, right? They're change

trying to change how healthcare is accessible to everyone. They're changing

the industry. They want to be the one to predict the future. And there are also this layer of renewals. uh my resources are severely constrained uh so I'm just

like be viable for the classical companies their assumptions is world is predictable basis of competition is stable advantage is uh sustainable you can't change the environment uh so get a

good position size matters the differentiation matters capability matters and positional advantage is sustainable environment is predictable and develops gradually without major disruptions this is what classical

companies think about and this is also why Classical companies always go to like failure and new technology will replace them overall because they will just think about staying in whatever

business that they are staying in and they're not changing because this is all they know.

And the classical thought flows are analyze basis of competitive advantage, analyze fit between firms capability and the market. Forecast how these will

the market. Forecast how these will develop over time. construct a plan to build and sustain advant advantaged positions and executes rigorously and efficiently. This type of classical

efficiently. This type of classical companies uh always underrated uh the the value of new technologies disruption. So business environment is

disruption. So business environment is not predictable uh nor maluable uh and prediction is hard, advantage is transcendent uh winning comes by

continuous uh experimentation and identifying new options more quickly and more economically than competitors.

serial temporary advantages. Big tech

companies these days trying to adapt to AI as a new technology uh they do know that advantage is transient. They cannot

predict the future but they are doing a lot of experiments on their existing user behav because they do have a large market size uh to see what are the new

options that are uh feasible.

So their thought flow continually uh vary approach and generate range of options to test and select the most successful ones to scale up and exploit

and then repeat. So it is very action oriented and not analysis oriented. So

they do their like their strategy is very shaped by the experiment that they do which I have thought about this a lot. Uh as big tech company it is very

lot. Uh as big tech company it is very easy to do this type of approach because you are not ruining any of your major uh metrics let's say um you do AB testing on all of the things trying to make sure

that you don't disrupt your own revenue and user engagement. But the caveat here is every time when the new technology comes in consumers need time to adopt

it. So it doesn't show up on your AB

it. So it doesn't show up on your AB testing. Uh your AB testing will always

testing. Uh your AB testing will always tell you that consumers don't like AI but it is really true, right? The

consumers who love AI might not use your platform. And then we have visionary

platform. And then we have visionary assumptions. Uh can create an

assumptions. Uh can create an environment by themselves. Future can be predicted. Uh win by building a new

predicted. Uh win by building a new market reality. Create new market and

market reality. Create new market and products. Disrupt the existing market or

products. Disrupt the existing market or business models. identify and address a

business models. identify and address a major source of uh customer disconent discontent uh or latin need uh and recognize an emerging mega trend before

others. So these are the what we call

others. So these are the what we call like the AI startups right trying to define the future. I think right these days it is such a bubble on both sides like the AI startups are so in the

bubble and the AI and the big companies are so in the bubble. So it's really hard to tell like here in the different layers we're not talking about oh some of the layers will definitely win the

other layers and vision uh a valuable feature possibility and work single-minded to be the first to build it uh persist in executing and scaling the vision until full potential has been

realized uh it's about imagination realization and is essentially creative because I'm also building my side project at the same time while working on LinkedIn I feel like multi-personality every day being a

visionary on my side project and re reimagining how people will interact with people in the future and working with existing users at LinkedIn. Really

two sides of different thinking process shaping assumptions. Uh the future is

shaping assumptions. Uh the future is unpredictable but can be shaped.

Opportunity appears early in industry evolution. Conship the industry alone

evolution. Conship the industry alone need to share risk, contribute uh complimentary skills and build new market quickly ahead of competition. Of

course, now we are talking about Tesla as a very visionary uh company, right?

But back then, Elon Musk is very persistent on not to IP their technology, a way of showing that they're the first to build it and also they want to shape the industry. They

don't want to be the only one uh to build the electric vehicle. So that's

why they don't like it technology and want all the companies to build the EVs together. Thought flow engage other

together. Thought flow engage other stakeholders to create a shared vision of the future at the right point in time. build a platform to orchestra uh

time. build a platform to orchestra uh collaboration and uh evolve the platform and shareholders ecosystem through scale while while uh preserving flexibility

more about ecosystems that individual firms rely as much on collaboration as competition for example cloud computing services and companies are also playing

the shaping role in today's AI world and a lot of them are thinking about how to help the AI AI startups who are like AI companies all all of the cloud based services or companies are starting the

startup programs right they're giving their extra credit uh they're giving their AWS credits and maybe open AAI credits whatever to put all the benefits into one program to enable the startups

because they want to create an ecosystem and then we have renewal current way of business cannot be sustained pro tracks uh mismatch between firm strategy and environment where acute system of shock

external and internal changing course is the only way to survive these are the struggle companies and their thought flow is uh recognize and react to the uh

deter reorating uh environment. Uh act

the decisively to restore viability.

Refocus business to ecomize uh cut cost.

Uh preserve capital, free up resources for next steps. Uh pivot to one of the other like four approaches. uh

increasing common uh because of the number of companies getting out of the steps with their environment. So you can see that like for example these big tech comp tech tech companies these days

right when AI first started they're like cutting cost they don't know how AI could build additional value for users but what can do they can do is cut cost

this is especially true in like enormous tech companies uh Meta Google like fire a bunch of people Microsoft right lay off a bunch of people uh because it could cut cost first right and then they

could think about how I can utilize the existing human resources I have to create new values in the future. Um, cut

cost is also a time for them to restructure things to change themselves from renewal to other layers. What do

you think about scale AI?

>> I heard it's a bubble and most of its like value come from Alexander Wong who went to meta and like was beat up by

another AI. I I'd say adaptive just

another AI. I I'd say adaptive just because they realized, oh, LMS are like a new thing and these images need to be um uh what's it called? Sorted out. Oh,

wait. We could make a data labeling company and we could be the first to do it and have a bunch and then hire a bunch of um people from Africa to do it, which is what they did. I read an

article which is cool.

>> I have an argument companies can have a mix of two all as well, right? scale AI

may right now feel like they are not doing anything great or it used to make sense it's not making sense now but they might have something right in the future right which is going to go right for them

>> I think scalei is very adaptive um I think after LM scali started a new called generative AI or they're trying to label like multi modality uh data uh

still using like human labor but they are trying to use domain experts and right now they domain expert to label advanced AI but then Alexander Wong went like left so I don't think they were

like very successful in that business uh and they are struggling um right now so I do definitely think that they are trying to be adaptive but uh after one we could see whether they still have a

sustainable business one question that I'm very uh curious about which I also like asked uh people from Scalia and people in the similar companies is that how much of their original top uh of the

labeling the traditional AI can be replaced uh given building agent agentic model I don't know how much of it like traditional AI wise can be automated

using LLM so there are two ways of the mattress right one is the market growth and one is the market share for example if you are low market share and low

market growth u this is a dog business um this is usually the word that we use uh your market presence is weak and you're going to be difficult to make a profit uh if your market share is high

and your market growth is low then it is cash cow it is high market share low market growth and you're well established however the market isn't growing and your opportunity are limited

and and if you have high market growth and low market share which is most of the AI startups today uh the opportunity like no one knows what to do with this opportunity in this series thoughts as

to whether increased investment is warranted and then you have the stars which is high market growth and high market share uh you're very very well established and

this is a star business there are fantastic opportunities charged model it could be at like originally low market share but high market growth and right

now I think there are like maybe on the consumer side they're like high market share and high market growth is what I'm assuming I remember they have if I remember it correctly they have 500

million monthly active user um don't quote me on that definitely double tech but uh their growth is pretty high and their current market share compared with the their competitor is pretty high as well and their customized GPT because

they're serving the enterprises and enterprise contracts is uh is usually more stable than the consumer adoption so it could be a cash cow business for them businesses that are relatively new

for example the open AI's investment on hardware products with Johnny um that we don't even know what that is so um it could be high market growth

low market share right now or a dog business who knows right but uh eventually they every business is trying to be a star business. So the very two common lies. Okay, the very two common

common lies. Okay, the very two common lies I want you guys to remember. Milan

police always say that this is such a big market and we are the only one of the many players. Every time Google said this in the antitrust meetings and the other lie is other companies, right? We

don't have any competitors in this market. Huh? That's probably because

market. Huh? That's probably because you're not looking at the right market, right? So these are the very two uh

right? So these are the very two uh common lies um from big companies and uh startups.

And what is a competitive advantage where in the AI world people love to call it moat. So to be a sustainable competitive advantage you need to meet three criterias and this is very very

very important. Uh if you only remember

very important. Uh if you only remember two things from today's lecture one is the core of business is creating values and the other one is the three criterias

for competitive advantage. The first one is you have to provide values for customers. This is very basic

customers. This is very basic fundamental or nobody will care about your advantage. And second, you have to

your advantage. And second, you have to be unique, right? Because it is a competitive advantage. And the third one

competitive advantage. And the third one which is the most important one is hard for competitors to acquire or imitate.

Question about why branding is not a competitive advantage. My personal take

competitive advantage. My personal take is for the AI startups for the startups branding is not a competitive advantage because startups branding is very easy

to uh be imitated or acquired uh by other companies. But if you're saying

other companies. But if you're saying that this company has been there for decades like Apple like that image is relatively hard to be chased up by their competitors, right? Ferrari is very hard

competitors, right? Ferrari is very hard if you chased by other competitors. Um

so it depends on the company stage as well and that's also why a lot of investors today realize that most of the AI startups don't have competitive advantage because first they have they don't have model advantage most of the

startup application startups and second a lot of them don't have data advantage either right so what is there that is providing values for customers unique

and hard for competitors to acquire or imit imitate I think there is another caveat here my personal opinion as Speaking for all the investors out

there, don't cancel me and not stop giving me founding and blocking me as a entrepreneur if I say so. I think most of the investors today because their investment in web 3 and the previous

like not really as big as the.com investment they are kind of too pushing for having a mode right now. It's hard

for a one year two-year company to build mode also need time to build up right you can't just say that oh all of you guys are AI rappers and because AI is model

data whatever so you guys don't have mode I think there will be mode uh on the way that they were building the product uh there will be other technical difficulties that they encounter and um

that will become their mode in the future but not as a simple framework as the investor's first eye u when they look at the product. Uh another pitfall

I would say uh from investors and also from product managers as well is they see uh great user experience as a competitive advantage. Uh I don't think

competitive advantage. Uh I don't think so either. I think um good user

so either. I think um good user experience is is very easy to imitate or you're saying uh a more deeper problem.

Let's say a how to define a good user experience right UI is not only the simple thing you probably are saying oh when you open LinkedIn app you have to wait for uh five seconds when you open

Dolingo right you need to take like 10 seconds and then you are saying that this is not a good user experience for Dolingo then it is we are not talking about user experience we're talking

about infra capability right that is a competitive advantage but the user experience itself is not when it comes to competitive advantage. You want to be very strict to the point. Uh you can't just talk about oh it's a user

experience is good. User experience is too big of a idea. Then you want to maybe dive deeper to see what build a good infra. Uh there are two things that

good infra. Uh there are two things that build a good technical infra. One is

technical talent and the second one is h how shitty is your codebase. Right? So

if let's say uh finding good uh technical like talents you probably spend let's say if you don't have you are not lack of money then you can put like a 100 million uh bon signup bonus

on talents then that could be like in months you can chase up for uh in months and then it depends on the talents to change your shitty infra right that will

take pretty much years. So let's say if you are a small app then probably take one to two years. Uh if you're a big app let's say LinkedIn is not even that big but uh doing the infra change might take

us like two to three years to go through everything. Uh it also depends on what

everything. Uh it also depends on what layer of infra we are talking about it is more application layer is probably faster more fundamental layer it is even harder. So here I would say that for

harder. So here I would say that for software company usually I would define it hard to imitate or acquire as to three to five years because software company move way faster than hardware companies. If you're saying hardware

companies. If you're saying hardware company I would say at least 7 to 10 years if they cannot chase you up then that is your advantage. Uh product

management skill set. Uh today we talk about product strategy right. Uh the

industry analysis, company analysis, competitive analysis. Um that is very

competitive analysis. Um that is very high level of product management skill set. uh usually when you're entry- level

set. uh usually when you're entry- level product manager in a big tech uh you do product design and product execution you don't do as much as product uh strategy the strategy is pretty much handed to

you after your first or like second yearish uh you started to have your own product strategy right so for example if you are working on uh let's say as

marketplace right you probably can develop a strategy and road map for the next two years that's easier after like one or two years of work experience Um after three years you probably want

to talk about oh what my product is going to do in the next like three to five years and also you have a bigger scope. So you probably define like let's

scope. So you probably define like let's say onetenth of the bigger company's strategy. So it's like step by step but

strategy. So it's like step by step but initially you want to be super good at product design and execution. Uh you

want to be able to ship product first.

For the sake of this course we're going to mainly focus on product strategy. Uh

but I will also give you guys like uh product design and execution questions uh just for a teaser. Uh we can do this like today we have this like icebreaker to talk about everybody's products moment and what you want to achieve in

your life. Huh. In the future it won't

your life. Huh. In the future it won't be that chill guys. Uh we're going to have mock interviews and have product design execution questions uh to make things more fun. And I like debates. So

uh I'm going to see you guys debating.

But the whole structure the whole life like life cycle is here. Once you know where your product is heading, you want to f focus on what uh are your target users and what are your users pain

points and that is how you define your job to be done. And as long as you have your job to be done, you design your sol you you design your solutions and design your MVP and of course within this

process you will do a lot of like market research and UX research uh to validate your hypothesis. Uh usually in your job

your hypothesis. Uh usually in your job the product manager will have a lot of hypothesis based on your uh user empathy, your conversations with users um and your data. Eventually you want to

validate those hypothesis usually through two ways. One is research, one is experiments. Um so research is market

is experiments. Um so research is market research and UX research. Market

research is before you have a design.

You do market research to see whether users have that need. And UX research is when you have a design and see how user interact with that design. And then the product execution you want to define

success metrics. You want to know um how

success metrics. You want to know um how to define basically the success of the product and that's through success metrics and prioritization AB testing go to market go to markets involve

marketing and business involvement business partnership with other companies or other products uh customer feedback and crossf functional collaboration. So we are talking about

collaboration. So we are talking about models are becoming commodity and given what you learned today our question is what should open AI do to maintain

competitiveness in the future where all major labs have high performing and cheap models. This is a huge assumption

cheap models. This is a huge assumption that they are having high performing and cheap models. But let's develop the

cheap models. But let's develop the report based on this assumption and discuss how open AI should maintain their competitiveness and how to

structure a road map for OpenAI as a company to ensure their success. I would

expect you guys to research on a lot of like numbers about OpenAI and their competitors and reach out to people on LinkedIn to conduct interviews. So it's

a lot of work. Usually previously when I did my report uh for Compstract courses I interview at least five people per week about your report first I value a

lot on your data sources don't tell me your feelings you have to have evidence to support after data sources you tell me your insights and how to get your insights through the framework that we

learned today okay again frameworks are the tools for you to cover everything hopefully your report should tell the audience something we uh we don't know Today you guys have chat GBT uh to help

you guys. I don't care whether you guys

you guys. I don't care whether you guys use AI or not, but I do care about the insights in in it. So yeah, I don't care about your wording, but I care about your thoughts. Um because all of you

your thoughts. Um because all of you guys are thinking about the same topic.

So I would expect to pick someone from like whatever team and present your report and the others will um shoot you questions.

>> Oh, and is the goal here to interview just open AI employees or could we just interview other people in like the AI space? other people as well. However you

space? other people as well. However you

can get your information the fastest, the more accurate. So I share some uh outreach framework in my last slice.

This is how you can get the highest reply rate from LinkedIn. What I found from my experience reaching out to people sometimes reaching out to the employee is not the best way because

sometimes the employee won't tell you their thing. people are very like

their thing. people are very like sensitive about confidentiality especially uh in companies like Golden AI and that's why I never know what my boyfriend is working at but uh what I

found really helpful is you could interview their competitors and ask your competitors how they think about OpenAI and that is a way faster way for you to

get information and your competitors will also very curious about when you interview like multiple competitors what are the other competitor thinking about

this person uh this company. So you

should follow up with whoever you interview with more information. Okay,

that is showing your appreciation. Thank

you for their information and here is more of my analysis and hopefully your analysis will be helpful for the people in the industry and also uh interviewing past employee is also a trick. Uh good

luck with all of y'all. This is a very hard topic and um you can also tell me that OpenAI is dead. there's no way that they can turn this over. Open eye is not

gonna pay you for consulting if you come up with that solution. McKenzie doesn't

exist because of that, right? So, you

have to come up with something and enjoy your collaboration with your partner.

>> Thank you.

>> Thank you.

>> Thank you.

>> Thank you.