Scale versus Relationships.
What will happen to the "Medium Sized Business" in a time of AI?
One of the most powerful qualities of the artist is who they create for. It's either for someone they know, in a setting they know, or for themselves, for their muse—nothing between. Not for artists is the idea of a “representative persona”, market research, or any other form of average. They know their clients, or they wait for the right client to turn up.
Businesses are different. They produce to a specification with greater precision on costs and broader definitions of the customer. Businesses aim for a sector, and a defined persona. The bigger the business, the broader the definitions and the more precise the cost. Businesses use a different language - stock turns, work in progress, production runs, turning what is created into an economic unit with a job to do.
Artisans sit between the two. They have many of the instincts of the artist with the constraints of a business. They need to turn a profit. Garrets may be romantic, but they are cold, draughty and don’t keep partners happy.
The differences have been increasingly evident to me recently, from the joiner who did heritage work on the house, to the engineer who services our classic car, to the growers we talked with at the Malvern Show this weekend. They are characterised by conversations that give the work identity and personality. Whether it’s the wood we use, or the compromises we make on parts no longer available, or whether a particular plant will work in our garden, the work has a place in the conversation.
There is no place though for intermediaries, “customer service agents”, salespeople, or apps. It is a 1:1 relationship with people who recognise each other on sight. It is hard work and does not scale. It yields vibrant, small, sustainable businesses, not runaway unicorns.
Which leaves me with a question hanging. As AI gets better and businesses that can scale get ever more cost competitive, what happens to the medium-sized business? Not big enough to compete on price and guaranteed quality, but without the underpinning personal relationships of the Artisan.
I guess we’ll start finding out soon.