Listened to this today, and now I’m struggling to think of *any* examples where incumbents successfully absorbed a fundamental technology shift by making it a feature.
Are the companies bolting on "AI features" already cooked?
Evans: With any of these fundamental technology changes, the incumbents always try to make it a feature and they try to absorb it… Then over time, you get new stuff. You unbundle existing companies because of something that’s possible because of this new technology.
Here are 9 ideas that came up in my conversation with Benedict Evans.
Judging by the comments on YT, he has some very controversial AI takes.
1. Platform Shifts Are Normal: "[AI] is the biggest thing since the iPhone," Evans says. "But it's only the biggest thing since the iPhone." Every decade brings a new platform that seems civilization-altering. The internet was going to change everything. Mobile was going to change everything. Now AI will change everything. Until it becomes just software. The revolutionary always becomes routine.
2. The Data Moat Is a Mirage: Everyone thinks Google and Meta have an unbeatable advantage because of their data. But LLMs need such enormous amounts of text that everyone needs all the text there is. "All the text there is is kind of equally available to anyone," Evans observes.
3. Brand Beats Product (For Now): ChatGPT dominates while the models underneath are becoming indistinguishable. Do a blind test between Claude, Gemini, and ChatGPT: most people can't tell the difference. Yet ChatGPT captured the Google position in AI. In commodity markets, the first brand that sticks usually wins. Being best matters less than being first in the mind.
4. Incumbents Make Everything a Feature: Kodak went all-in on digital cameras and still died because the business model changed. Every incumbent tries to absorb new technology as a feature of what they already do. But platform shifts don't add to your product. They replace your product.
5. Pretty Close Isn't Close Enough: Evans tried AI for research in his domain. The error rate? "Dozens per page." He's blunt: "Today it has zero value for quantitative analysis." The gap between 99% accurate and 100% accurate is infinite when trust is binary. Until AI crosses that gap, it's a toy for brainstorming, not a tool for truth. Near-zero errors aren't zero.
6. AI Can't Judge Its Own Originality: AlphaGo could make original moves because it had a scoring system. LLMs don't. "Variance is bad. Originality is a lower score," Evans explains. Without external feedback on what's actually good, AI generates variations, not innovations. You can't create what you can't evaluate.
7. The Commodity End Game: Meta made Llama open source. Amazon wants models sold at cost. "They want to make it a commodity," Evans notes, "and they differentiate on top." When your competitors want your product to be free, you're in a tough spot.
8. Writing Is Thinking: "If you're thinking without writing, you only think you're thinking," Evans quotes. Students using AI for homework skip the mental work that builds reasoning. Delegating writing means delegating thought. The shortcut around thinking leads nowhere worth going. We build our minds by using them, not by having machines use them for us.
9. You Can't Pattern Match on Summaries: Reading other people's compressions of data creates an illusion of knowledge. Evans sees patterns because he reads source material, not summaries. "You're consuming a compression of the work but not the actual raw work." Second-hand insight isn't insight. Pattern recognition requires requires high quality data.
Search for "Benedict Evans, The Knowledge Project"