Shopping for AI Shovels: The MosaicML Acquisition

Whenever a disruptive technology becomes available, there is a mad dash as every company rushes to incorporate it as quickly as possible. The race makes sense: new technologies equal new opportunities for better profits. The interesting thing is that a company's starting position with their original product ends up being the most important thing for determining what profits each company captures.

Said simply, it is better to have a huge head start than to sprint the hardest. 

One of my favorite strategy frameworks to help grok this is a theory from 1997 called Rugged Landscapes. Picture a mountain, where the summit is the most profits available to a firm. 

Companies navigate the mountain by changing their coordinates on the X and Z competitive axis. However, a market is not a single mountain to climb, it is a rugged landscape. 

There are multiple peaks, multiple places where profitability (or pick your performance metric of choice for the Y axis) can reach its zenith. Think of how Microsoft and Intel were parts of the same value chain in personal computing but were both able to extract enormous profits. Essentially, in the landscape they occupied two different mountains. 

Rugged landscapes help strategists understand that it’s not only where you start that matters, but it’s how far away you need to go. And because companies are constantly shifting, there can only be one king of the hill for an individual mountain. To make this even more difficult, a landscape isn’t static. It is constantly shifting. Mountains of profit grow or shrink.