The Good Stuff, with Pete and Andy - Episode 5: Billy Big ModelsHosts: Pete and Andy (recording at City Beach, Perth)Episode Overview: Pete and Andy challenge the belief that more advanced AI models are needed for business transformation, arguing existing models are already sufficient to achieve dramatic cost reductions. They explore frameworks for AI implementation and why businesses should act now rather than waiting for future developments.Agriculture Mechanization as an AI Parallel (03:40-06:42)Before mechanization: 10 farm workers needed to feed 1 person; after: 1 farmer feeds 100+Similar dramatic workforce changes could occur in knowledge sectors with AIThe "Billy Big Models" Concept (11:06-15:10)Central question: Do we need more advanced AI models for business transformation?Pete argues we don't need models better than what existed 9-12 months agoChallenging the industry narrative focused on larger models and AGIAugmentation vs. Agentic Approaches (18:12-22:00)Augmentation: Using AI tools to enhance existing human jobs (current focus)Agentic: Completely rewiring business processes on an "AI native" standardThe distinction between "assist" vs. "automate" approachesTask Decomposition as the Key (23:22-25:55)Breaking down jobs into "subatomic" tasks is crucialEach agent only needs to do one small task well, not an entire job100 simple agents is exponentially easier than creating one complex agentHuman tasks ($100) → LLM tasks ($10) → silicon/code tasks ($1)Traditional Business Model Problems (29:10-32:38)Companies adding AI as "tool creep" rather than rethinking from first principlesPursuing 5-15% efficiency gains when competitors might achieve 90% cost reductionProcesses designed around humans remain expensive even with AI toolsE-commerce Parallel to AI Transformation (35:44-39:12)Limited approach: existing stores simply adding websites (e.g., Myer)Transformative approach: complete rethinking (e.g., Warby Parker)Question of whether incumbents will be displaced by AI-native businessesObstacles to Business Transformation (43:56-49:57)Lack of understanding about AI implementation approachesInsufficient intent, time, and money to transform operationsMiddle management's disincentives to reduce team sizeWaiting for "AGI" as an excuse for inactionThe "Learn to Surf" Analogy (53:28-55:51)Business transformation requires reading patterns like a surferTechnology shifts as waves that businesses must learn to rideThe ocean/wave is more powerful than you - you must adapt to itAgency as the New Competitive Advantage (56:46-01:00:02)High-agency individuals will benefit most in the next 5-10 yearsAgency may become "the new IQ" for harvesting opportunityThe need for adaptability rather than rigid expertiseAdvancements Beyond Bigger Models (01:03:40-01:10:45)Recent key advancements weren't bigger models but new techniques:Multi-agent architectures mirroring how teams of people approach problems.Notable Quotes:"If you're sat around waiting for AGI and AGI takes 10 years, and right now I can take 80% of the cost out of a business line, I will crush you in the market.""What would this process look like if I now had unlimited access to intelligence?""Agency is going to be the new IQ. That's the standard for harvesting opportunity."

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