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Comment by mrkramer | Hacker News Reader

>Researchers at MIT published a report showing that 95% of the generative AI programs launched by companies failed to do the main thing they were intended for — ginning up more revenue.

AI startups were meant to solve problems in novel ways not to amass revenue.

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the 'novelty of the ways' is usually not nearly as much a factor in adoption than if said change would contribute to the amassing of revenue.

I smile with glee when these people fail. The fundamental issue of modern capitalism is that its a coerce and exploitative system, true believers (who are in charge unfortunately) ignore this, and think money and value are the same thing.

Let me show you what I mean: Let's someone runs a grocery, and they want to make it more profitable. After looking at the value chain, they conclude the person growing the lettuces makes 10% of the profit, logistics makes 40%, and retail 50%.

So they conclude that the best way to improve the business, is to optimize the retail side.

Then you walk into the store and see the tiny withered lettuce on the gleaming fancy shelves.

If they decided to focus on where the value is created, and helped the farmer grow better groceries, everybody would've been happy.

In capitalism everybody specializes in something, retailers in trading, logistics in storage and transport and producers in producing. The most efficient way to improve all that is to have vertically integrated business where you do all of the above. In my country we had one big retailer like that but it became so huge and in the end it imploded. And yes I agree that capitalism is exploitive and I think that instead of working for salary people should work for equity. I would certainly be more motivated if I own piece of the business instead of merely getting a salary.

> In capitalism everybody specializes in something, retailers in trading, logistics in storage and transport and producers in producing. The most efficient way to improve all that is to have vertically integrated business where you do all of the above.

I don't agree with this, merging completely unrelated activities into one company isn't good or efficient - it's only a good idea because the perverse incentives disappear, which exist, because the big powerful fish (the retailers who monopolize access to markets) can dictate the terms for small and divided fish (the producers who produce the goods).

This is endemic in the system, and very hard to fight against.

It's also incredibly prevalent in the field of software engineering as well - if I create a best-in-class open-source tool, I won't see a dime of return on it (maybe very little), even if a huge cloud provider build a product on top of it that makes billions (this has happened too many times to count).

If I do the same thing in the confines of a big company, the end result wouldn't look like capitalism at all - lets say I do the same good work, but someone has an even better idea or executes better on it - in a free-market system if somebody were to come up with a better tool, they would just announce it, and people would be free to move to it - in a corporate setting, it would be seen as redundant, a waste of money, and an organizational red flag to run 2 separate parallel teams.

It'd be great if there existed a system that rewarded individuals and organizations according the value they bring to the table. However at the very mention of 'intrinsic value', capitalists break out in hives and call you a Marxist.

If you're alluding to the fact that a lot of startups run at a loss to capture as much of the market as they can, that is true. But I don't think that's the point here.

Revenue is probably the wrong measure, it should be profit. And a startup that doesn't somehow turn into profit for its _customers_ usually doesn't see much traction.

They can either increase revenue (there's a lot of AI sales tools that promise just that), or, more commonly, reduce costs, which also increases profits. If it saves time or money, it reduces costs. If it doesn't do either of these things, you'd have to really enjoy the product to still pay for it.

lol

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