A question for you…
Do you know which company commercialised the steam engine?
Think about it…
It must’ve become a global behemoth conglomerate, right?
It would’ve dominated the Industrial Revolution’s profits and turned early investors into the first millionaires.
But I bet you can’t name the company…
Which shareholders were made outrageously rich on the back of that invention which changed the world?
They must’ve been the Elon Musk of their day. Perhaps their ancestors are still living off their trust funds today?
The thing is, I can’t name them either. And I bet you can’t. And I suspect it’s because they don’t exist…
The inventors of the steam engine did not grow absurdly rich on the back of their planet-changing invention.
And the company they formed is not exactly a household name. Perhaps because it doesn’t exactly roll off the tongue as easily as “Google” or “Nvidia”.
It was called the “Proprietors of the Invention for Raising Water by Fire”. No wonder it struggled…
In the end about 600 so called Newcomen Engines were built and used across Europe, mainly to drain coalmines of water.
And that’s the first big hint. The invention made the coal mine owners rich instead of the steam engine’s producers. Back to that in a moment.
James Watt, whose surname you might recognise, came up with an efficient enough steam engine to trigger the Industrial Revolution and bring Great Britain’s industry into …power.
Watt and his company weren’t exactly enriched by the invention and patent. They got stuck in legal battles over the patent’s enforcement instead.
But let’s get tot the point…
The Googles and Amazons of the steam engine were not its inventors
While few know the names of those who invented or commercialised steam engines in and of themselves, we all know the names of those who figured out how to actually use them in a line of business. The people and firms who harnessed the steam engine to do their customer’s bidding, rather than just pump water around. Names like Rockefeller, Carnegie, Morgan and Vanderbilt, for example.
People like Newcomen, Savery and Watt incorporated what should’ve been the most profitable companies in the world up to that time.
But they failed to make much money. And so we don’t know their names, nor their companies, let alone their missing fortunes.
The shareholders of “Proprietors of the Invention for Raising Water by Fire” missed the boom.
Shipping, coal mining and the railroads were the robber baron’s industries. It was all about who figured out how to use the new tech that actually profited.
Profits from AI will follow the same fate
Do you know who invented the internet? Did they get rich? Or do we revere those who founded companies that turned the new invention into something useful?
The money was in software and hardware, not “the internet”. The money was in using the internet to create a global shopping centre like Amazon’s.
How many computers would we have today without the internet? How many social media companies?
Sometimes, entirely new industries are born from new technologies becoming viable. Other times, they revolutionise existing businesses. It probably doesn’t matter to the investors who buy in. They get mighty rich, either way.
Where are the Googles and Amazon’s of AI hiding?
That’s the mission my old friend Callum Newman is now on. He wants to figure out which industries can be disrupted by AI and which companies have figured out how to profit from that disruption.
If he can get it right, his readers should be positioned to benefit from how AI changes the world.
It’s easy to forget the lessons of history and presume that AI’s profiteers will be the companies that are driving AI itself. They have been so far. But I suspect those investing billions of dollars and countless hours into the tech are in for a rude surprise.
In this presentation, Callum likens it to the dawn of the computer age. Back then, nobody had a use for the new tech. As the President of IBM said in 1943, ‘I think there is a world market for maybe five computers.’
And yet, today…
Anyway, the fortunes were made by those who figured out how computers could be used, not those who invented them. Indeed, Alan Turing met a rather grizzly end…
Companies like Amazon and Google became globally dominate corporations on the back of computers. But not by making them. Indeed, IBM was eventually shouldered out of that business.
So, who are the Amazons and Googles of AI? You won’t find them at the forefront of the AI revolution. You’ll find them in industries where AI can be utilised to radically improve the lives of customers. You’ll find five of Callum’s ideas here.
Until next time,
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Nick Hubble,
Editor, Strategic Intelligence Australia
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