Monday Memo
A Byte of Knowledge
Soon, your customers and clients will expect you to use AI as much as they expect you to use the internet. And unless you’re developing your own tech, which most folks aren’t…
AI as a unique-selling proposition alone won’t be enough to stand out.
You need to show your potential customers HOW you’re using AI in a new way to solve their problems. In other words, you’ll have to position yourself as different - even if you’re utilizing something as common as ChatGPT.
Fintech investor Morgan Beller points to the bottled water industry as the ultimate example of this. Just look at the metal-themed Liquid Death.
Inside you have the same old water as everyone else. But on the outside this edgy, authentic brand resonated deeply with an underserved demographic.
Liquid Death cut through the clutter in the oversaturated market by zigging when everyone else zagged. And it paid off big time - to the tune of a $700 million valuation.
You must create a compelling reason for people to choose you over your competitors - AI alone will not be enough.
Something to Ponder
It took Nvidia 24 years as a public company to reach a $1 trillion valuation. But then just 8 months to reach $2 trillion.
On the surface this is an obvious example of the power of compounding. Overtime you build momentum, and growth accelerates exponentially, right?
However, Nvidia's skyrocketing valuation also highlights a deeper phenomenon – exponential growth is happening faster than ever in this new AI-driven world.
Take ChatGPT as another instance. It grew quicker than any other user base in history, reaching 100 million monthly active users just two months after its launch.
For context, the previous company to hit this milestone was TikTok at about nine months. We need to radically adjust our expectations for how rapidly exponential growth can occur now.
First, you must open your mind to the possibility…then, prepare yourself and your business to scale at unprecedented speeds.
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We Asked – AI Answered
Our Question: “I've noticed that a new gas station is being built across the street from an existing one. How could opening a gas station in such close proximity to a direct competitor be a smart business decision?"
ChatGPT's Answer: Here's a breakdown of why a new gas station might open across from another one and still be successful or at least rational from a strategic point of view:
Market Demand
High Traffic Area: If the area has high vehicle traffic, there may be enough demand to support multiple gas stations.
Insufficient Supply: The existing gas station might not be able to serve all customers during peak times, leading to long wait times and a potential market for another gas station.
Consumer Behavior
Brand Loyalty: Some customers may prefer a particular brand of gas station for various reasons, such as loyalty programs, perceived fuel quality, or previous positive experiences.
Convenience: Some drivers might find the new gas station more convenient, perhaps due to easier access or better egress.
Economic Theories
Hotelling's Law: In economics, this is the observation that in many markets it is rational for producers to make their products as similar as possible and locate close to one another geographically. This minimizes the risk customers will go to a competitor and allows the businesses to capture the market evenly.
Game Theory: The "game" of location selection can be complex, with multiple factors considered by each competitor, such as anticipated consumer behavior, traffic patterns, and the actions of the existing gas station.
Real Estate and Development Factors
Lease Agreements: Sometimes, the decision to open a gas station is influenced by favorable lease terms or real estate opportunities that are too good to pass up.
Zoning Laws: There may be limited commercial space that is zoned for a gas station, compelling competitors to be near each other.
Future Prospects
Long-Term Development Plans: The area might be slated for future development that could increase local traffic or population, justifying another gas station.
Acquisition Strategy: Sometimes a new station is opened with the intent to outcompete and eventually buy out the existing station, consolidating the customer base later on.
Customer Service
Service Quality: Superior customer service can create a loyal customer base and differentiate the new gas station from its competitor.
GOT 15 SECONDS?
Thanks for reading our new weekly "Monday Memo" edition.
Until next time!
The AI Marketers
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