Real Intelligence
We hosted our portfolio company leaders here in Columbia, Missouri, recently for our annual Operators Summit, and one of the discussions we had was around how we might better leverage technology to help make our (relatively) small businesses more efficient. It was then that I learned from Kevin, who runs our ridiculously cute and resoundingly fierce children’s clothing company Rylee + Cru (I know the kids in your life need some holiday style), that artificial intelligence (AI) was now handling some 40% of customer service inquiries and that that number had increased from just 10% in a few short months.
Someone else, listening in on the conversation, asked if his in-house customer service team, seeing this trend, feared for their jobs? But Kevin said no, that they loved the AI because it enabled them to spend more time solving the customer service inquiries that required depth of touch. And that I thought was an interesting observation.
See, customer service is one of those domains where I think the barbell applies. In other words, there are very few medium customer service problems. Rather, there are small problems that are best handled quickly and complicated problems that are best handled carefully. Further, while handling the small problems quickly can show up almost immediately on the income statement in the form of revenue retention, it’s handling the complicated problems carefully that can create tremendous lifetime value and turn your customers into zealots who will proselytize for your brand. Since we all want those, giving your real customer service people the capacity to do that is a big win!
After all, AI is called artificial for a reason: it’s not real (and it’s still bad at math). So an interesting thing to think about is which problems in your business might require real intelligence.
For example, looking at the data, AI would have no problem identifying sales or margin shortfalls and even making recommendations, trained on data, on how to fix them. But what if the root of the problem was that one of your salespeople had developed an addiction or that someone on the finance team was stealing from the company? Those are real problems.
Having implemented our new boards of directors, I find myself sitting on the board of Scratchmade, our newly-named events company that was born out of all of the building we did to host Capital Camp and Main Street Summit. Clayton, who runs that operation, and I were talking the other day about how we might continue to grow that business, and I said that I was so long-term optimistic about the opportunity of an enterprise that seeks to deliver genuine, memorable experiences to people that make us more real and more human. After all, I said, trillions of dollars of capital have now accrued to businesses that make us less human, which is how I think of social media, so why wouldn’t some percentage of that find the opportunities that do something so much more valuable?
Because in the end, that’s my hope for AI. That it can take away from us the things we spend time on that make us less real and less human, so, like Rylee + Cru’s customer service team, we can spend more time on the things that make us just that.
– Tim