AI, VR and Business History Rhyme

While we are presently obsessed with Covid-19 fear porn, other things are happening that we may not have noticed. The forefront of new products and services just now is Virtual Reality (VR) and Artificial Intelligence (AI). Especially the combination of them.

We can understand the movement if we look at history.

The progress

A hundred and fifty years ago a wealthy person had dozens of servants and many horses. The cost to maintain that was substantial. Thus, only the rich had many servants and many horses.

By 1900, the writing was on the wall for the horses. Henry Ford and others were replacing them. As electricity became more commonly available, home appliances replaced many (most) of the servants.

Fast forward to now. Three hundred horses under the hood is not uncommon. Two dozen appliances, washer, dryer, stove refrigerator, dishwasher, blender, toaster, iron, air conditioner, and others have improved life and replaced most of the servants. Even for the rich.

The thing to notice is that there were many inventions needed to replace everyone. Computers evolved differently in the beginning.

How computers evolved

In the 1950s and early 1960s two things became obvious. Computers had a purpose and they were expensive.

Software delivered on the purpose, and as computers advanced, the ability to run many kinds of programs on one machine grew. The problem was price. General purpose computers were few and beyond the financial reach of almost everyone.

Two solutions appeared over the next 20 years or so. Capability increased exponentially and price fell per unit of serviceability. By the mid 1970s mini-computers and micro-computers started to appear. Less capable, but less expensive.

Since the mid 1970s, the combination of ubiquity and price opened opportunities for new applications from the fast growing cadre of programmers. Moore’s Law reduced the price to near nothing. I recently checked the capability of my smartphone in terms of memory and processor speed. It exceeds the world’s fastest super-computer in 1992. It makes you wonder what 10 more years will bring.

AI and VR

It is inconceivable that the future will not include a combination of these that will replace many of the things we use now for entertainment, learning, and convenience. How hard is to imagine a walking tour of the Louvre with a highly skilled guide, while travelling to the cottage in your autonomous car?

Not hard at all. Actually kind of exciting to look forward to that ability.

The computer parallel

In the 1960s general purpose computers were too expensive and while it was nice to have them do the payroll, keep track of inventory, solve engineering problems, and calculate rocket trajectories, some people only needed a computer for a single purpose.

Enter Max Palevsky. He taught philosophy, particularly logic at UCLA for a while and eventually moved on to Northrup where he worked on building a computer that solved differential equations. Only.

In 1961 he and Robert Beck set up Scientific Data Systems to address the small, more confined, computer market. Their advantage was if you just needed one thing done you could harvest the power of a genral purpose computer for a tenth of the price. But it might not do the payroll. Their technology improved quickly and the company flourished.

In 1969 Palevsky and the others sold the company to Xerox for $920 million. And Max took back his initial investment of $60,000 and a $100 million more.

Nice story but how does it apply? The growth of AI and VR will happen with special purpose devices not general purpose.. An autonomous car will not run with one robot. More likely several dozen each tasked for a single variable. Proximity, control, global position, travel plan, and many more. Just as Max found the niche, developers today are not looking for general purpose robots. The same will happen with VR. It may parallel the home entertainment market. You will have a console and a control. The software or the link to the internet will supply the information it needs to show you the Louvre.

It is far cheaper to have a central repository of information with the ability to draw on it than it is for everyone to own a copy of the information. Public libraries serve everyone. Home libraries of the same size would be prohibitively costly.

The Future.

Ai will be everywhere but the interface will be VR. We don’t need to watch robots do mundane tasks, we just want the results of their work. Fortunately that parallels the way society is moving. Young people are more interested in experiences than things. Want to visit the Galapagos Islands? There will be a virtual reality app for that. Follow your favourite golfer at the Masters? There will be an app for that.

Want to discuss oriental art while using your autonomous vehicle. Easy. You could probably do that now.

How about learn to operate an excavator? I have done that. It is a little clunky, but nonetheless, compelling.

The only limit is time to develop the pieces, processor power, and bandwidth.

The takeaway.

The technology is limited so far, but as it advances you will see ambient advances like the way the room it smells. Maybe the wind or temperature. High end bike simulators have some of those now.

There will be new ways to make money with new products and ideas. There will be many more ways to lose money. Be  aware of your targets and their possibilities. Like Radio in the 1920s. Only one survived from the hundreds of entrants.

Gather experiences . You probably don’t need to see the Louvre several times. Tomorrow you can go the Hermitage for a couple of days and MOMA next week. Work out the airfares for that. And you won’t need a passport, a visa, a vaccination log, or a mask.

Travel destinations can be understood in depth before going to the islands. Better than brochures by how much?

Want to tour a mansion in Malibu. Easy enough. Real estate brokers will be on this application very early on. They will need a producer. Maybe that’s your skill.

Life is good  and will be better despite the madness surrounding us today. It has always been that way.


I help people have more retirement income and larger, more liquid estates.

Call in Canada 705-927-4770, or email don@moneyfyi.com

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