In episode 59 of the Leadership Minute, Tony Uphoff explains the advertising business model’s unintended consequences on the Internet, technology, consumers, and the economy, and how ChatGPT and generative AI represent a new opportunity to create a better business model that moves us away from the “attention economy” and instead into the “acceleration economy.”
This episode is sponsored by Acceleration Economy’s Digital CIO Summit, taking place April 4-6. Register for the free event here. Tune in to the event to hear from CIO practitioners discuss their modernization and growth strategies.
00:41 — “The original sin of the Internet was the advertising model,” says Tony. Once the pay-per-click (PPC) model of Google gained traction, it focused an entire generation of world-class engineers and developers on advertising-based technology at the exclusion of almost anything else. Imagine if even a small portion of these resources had been deployed on things like fractional payment systems; valuable newspapers, magazines, and content-centric websites might have flourished rather than faced extinction.
01:12 — “Look, I have no problem with advertising per se,” continues Tony. “It’s just that once advertising was put on steroids, we advanced data technology and algorithms, and unleashed them on consumers, igniting a series of unintended consequences.” As a result, we are now in an attention-based economy. The most valuable companies on the Internet have business models that require constant consumer attention to fuel an ad-based model, rather than providing healthcare, education, or business services. This monetizing of attention has led to significant health problems, particularly for young people.
02:07 — There’s another negative impact from the attention economy: As businesses like Facebook scaled to extraordinary levels, they sucked the oxygen and dollars out of the market, all but assuring we would have virtually no competition and limited innovation.
02:34 — The introduction and rapid scaling up of ChatGPT suggest that there is a new, powerful platform emerging on the Internet. ChatGPT is far more than a new search engine. What this new generative AI platform represents is an entirely new category, and one that has the potential to reshape how we both value and interact with the Internet. OpenAI’s generative AI platform may well be a major market transition, creating more opportunities for Internet entrepreneurs as well as investors.
03:12 — One of the most striking things about generative AI is that the breakthrough technology has been followed by a wave of actual companies and products much more quickly than in the past.
03:41 — Tony sees ChatGPT as something altogether different: an innovation that holds the potential for the Internet to shift from an attention-based economy to what it should have always been, the acceleration economy, fueling a new wave of economic growth and opportunity.
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