The Ambiguity Factor
Coping with the unknown
Amar Bhide’s The Origin and Evolution of New Businesses highlighted for me the role of ambiguity in business, especially in the start-up world. Rather than dealing with certainty, or even with quantifiable risk, business founders encounter “unknown unknowns,” plans that cannot survive the confrontation with reality, and the need to adapt to unexpected opportunities and threats.
As entrepreneurs encounter ambiguity, they are constantly learning. What you know when you first start a business is relatively little in comparison with what you discover while attempting to execute.
Because I see starting a business as a learning exercise, I am very opposed to entrepreneurs using “stealth mode.” Keeping your main ideas secret means cutting yourself off from information. Yes, you are hiding ideas from competitors, but untested ideas are not as valuable as you might suppose. Meanwhile, you are losing out on the information that you would otherwise obtain from discussing your product with potential customers and other experienced entrepreneurs. The trial-and-error experience that you could gain by revealing your hypotheses strikes me as much more important than the knowledge that you are trying to keep secret.
AI and ambiguity
I think that as of now there is more widespread ambiguity than has ever existed in my lifetime. The reason is that AI is developing rapidly, and none of us knows what its impact will be. There is a respectable position that AI is way overblown, and that its effect on productivity will be relatively minor. On the other side, there is a respectable position that AI will soon change everything. I am somewhere in between: I think that the probability is high that AI ultimately will prove to be very important; but I think that change will be slowed by resistance from culture and institutions.
What advice is appropriate to give to an 18-year-old today? At UATX, when a student would tell me of an interest in going to law school, I found myself wincing. Five years from now, when this student has finished her law degree, what will the path look like for a legal career?
As of now, AI’s are competitive with junior workers in the legal profession, but to be safe you need a “real” lawyer to check an AI’s work. But I would bet that in five years we will be in the opposite situation: an AI will reliably do the work of a senior lawyer; if you still use a human lawyer, you will need an AI looking over his shoulder in order to minimize your risk.
There are people who insist that certain careers are safe. They are confident that humans will always be better than AI’s at X, where X might be “judgment” or “creativity” or something else. I have my doubts. I see much more ambiguity in the outlook. Humans will still have a comparative advantage in some tasks, but I would not confidently predict which ones those will turn out to be.
If you are a college professor, how would you prepare students to cope with this unprecedented ambiguity? I think about this often, and I do not have clear answers.
An octogenarian entrepreneur - a millionaire many times over - was once asked why he still worked. He replied that he kept seeing opportunities to start new businesses and couldn't pass them up; he had trained himself to see the unmet needs and desires that others overlooked. Perhaps the best thing we can do for our students is to teach them to recognize and take advantage of the opportunities that surround them in a free society.
The "problem" is the ambiguity of other people's thinking. One's own thinking can be clear: Just work harder (as Tyler Cowen says) and use the new technology more than anyone else.